It was a bit disappointing for gold investors when the price of gold showed a decline again in the European session yesterday as expectations of a rise in the previous session would reach the level of $ 1,800.
On the price chart XAU/USD which measures the value of gold against the US dollar yesterday has made a rise to the level to a high of around 1790.00 to record an 8 -week high.
The rise in gold prices was driven by the weak movement of the US dollar since last week until continuing into the beginning of this week. This situation further strengthens the expectation for the price to rise to the level of 1800.00.
Also, another factor that supports the value of gold in the market is the Chinese government report will allow local and foreign banks to import gold in larger quantities into the country.
Subsequently, the price of gold has shown an increase at the beginning of trading earlier in the week. However, expectations for the price to continue to soar faltered when the price dropped back to the level to the RBS (resistance become support) zone of 1768.00.
Investors need to be vigilant after the price also falls below the Moving Average 50 (MA50) barrier level on the 1 hour time frame of the movement which gives an early signal for a bearish trend.
If the price continues to fall lower past the RBS zone around 1760.00, it is likely that the price will continue to decline towards the previous focus level of 1745.00.
However, if the price manages to resume rising, the high level reached yesterday will be tested before being overcome to head to the 1800.00 focus level.
