Gold prices soared higher in weekend trading after the US dollar experienced a sharp decline impacted by the results of the FOMC meeting.
To make matters worse, important US economic data published at yesterday's New York session was not encouraging.
The US economic growth reading on the Gross Domestic Product (GDP) data for the second quarter failed to meet upside expectations, but was slightly up from the previous reading.
On the XAU/USD price chart which measures the value of gold against the US dollar saw the price soar up to the level of around 1832.00 to retest the highs reached in the last 2 weeks.
Yesterday’s rise was seen to have continued the previous day’s price surge from the 1800.00 level after the price moved above the Moving Average 50 (MA50) level on the 1 -hour time frame for a bullish signal.
While the price movement that continued on Friday slowed back in the Asian and European sessions, investors expect gold prices to close trading at higher levels.
Beyond the highs reached yesterday, the price is expected to continue rising to retest the SBR (support become resistance) zone at 1850.00.
If the price drops back below the 1820.00 level, the decline could return to the 1800.00 support zone that has been the focus of recent weeks.
If the zone is no longer able to contain the fall in lower prices, investors will be prepared for the bearish trend of gold movement again.
A decline below the 1800.00 level is seen to be heading to the previous focus levels around 1765.00 and 1745.00 or even lower reaching the 1700.00 price zone.
