The strengthening of the US dollar since the New York session yesterday after the rise in the US inflation rate did not seem to shake gold trade to rise as far as the European session today (Wednesday).
During yesterday's New York session, as the US dollar strengthened and put pressure again on most major currencies, gold was also seen to experience a temporary decline. Yet it rose again before moving slowly at the end of the session.
On the XAU/USD price chart which measures the value of gold against the US dollar saw yesterday’s price decline testing the 1800.00 focus level before rebounding from that level to record a daily high around 1817.00.
The level was also reached on the increase last week but it is seen that it has not been broken yet.
Continuing on today's trading, the price is seen supported by the Moving Average 50 (MA50) level on the 1 hour time frame which gives a positive signal for the uptrend.
As of 4.30pm local time, gold price is seen moving around the level of around 1815.00 to re -test the weekly resistance level.
The 1820.00 price zone is seen as a permanent resistance zone preventing the rise of higher gold prices since its decline last June.
A higher rise beyond the zone will push the price to a higher level in the SBR (support become resistance) zone of 1850.00.
On the other hand if the US dollar manages to put more pressure on gold trading, the price decline could happen again to the 1800.00 level.
If the price falls lower below the 1800.00 level, investors will be ready for a change in the bearish trend of the gold price.
The price can reach up to the level of 1765.00 or a continued decline can lead to the support zone at 1745.00.
