As many gold investors feared, the value of the yellow metal displayed a further decline in trading on Thursday raising concerns that a fall in gold prices was imminent.
Let's take a look at the price movement on this XAU/USD chart which measures the value of gold against the US dollar.
Since last week, the price is seen hovering in the price zone of 1900.00 which was previously a bullish target after the price managed to pass its initial barrier at 1800.00.
This week, the gold price movement is still seen flat in the 1900.0 zone and managed to record the latest high around 1916.60.
As the current change in the value of gold is influenced by the movement of the US dollar, investors are cautious while awaiting the results of the US NFP employment data report on Friday.
The European session on Thursday began to see a further decline in gold prices after moving below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame of price movement for the initial signal of a bearish trend.
As of 4.15pm local time, the price has dropped to around 1890.00 to record a weekly low.
With the pattern displayed by the price on the XAU/USD chart, investors will likely need to prepare for a lower price decline to head to the support level at 1875.00.
The next decline beyond the support level is seen to be to the level of 1850.00 and for a longer period, the gold price is expected to re -test the focus level of 1800.00.
However, investors will be happier if the price of gold resumes rising as before.
The 1900.00 resistance zone needs to be broken before the expectation for the price to continue rising to the 1950.00 target level again.
Investors placed high hopes of reaching that high again after prices plunged from that level in early January 2021.
