Deviating from expectations to continue to fall, gold trading returned yesterday to give relief to investors in the precious commodity.
If you look at the XAU/USD price chart which measures the value of gold against the US dollar, it can be seen that last Tuesday the price dropped below the 1765.00 level to the 1750.00 level.
Yet in Wednesday’s trading yesterday, the price moved flat and failed to continue the lower decline below the 1750.00 level instead making a rise in the New York session reaching a high level around 1774.00.
While the US dollar remained strong, analysts saw gold also stand out as an investor's choice in risky market sentiment as a safe-haven asset.
Signaling for a reversal of the bullish trend, the price has passed the Moving Average 50 (MA50) barrier on the 1 hour time frame of the price movement. In fact it has become a support level for prices to continue rising in the Asian session this morning (Thursday).
The rise from the 1765.00 level has reached the level around 1778.00 as far as trading enters the European session and it is expected that the price movement will be more aggressive in the New York session soon.
The rally is expected to head back to the resistance zone at 1800.00 after the price moved horizontally below that level over the past week.
Overcoming the resistance will add more confidence for investors for the price of gold to move in a bullish trend again.
On the other hand if this bullish situation is only temporary, be alert for a deeper price fall below the 1750.00 level hit last Tuesday.
A lower drop below the 1745.00 level will push expectations towards the focus zone at 1720.00-1700.00 which will determine the direction of further gold price movements.
