While most expect gold prices to resume falling again, the opposite happened in yesterday’s New York session when gold prices displayed a rise.
This was driven by the publication of US consumer price index data yesterday which matched the forecast with a declining figure reading indicating a weak inflation rate.
Giving an indication that the move for policy tightening by the Federal Reserve (Fed) is still a long way off, making the US dollar move back to depreciating again.
The depreciation of the US dollar also affected changes in the value of gold which gave room for the world’s major commodity to rebound in trade heading into the weekend.
On the XAU/USD chart which measures the value of gold against the US dollar, the price has managed to jump past the 1745.00 level to head to the next focus level at 1765.00 in continued trading today (Thursday).
A rise above the Moving Average 50 (MA50) support level on the 1 -hour time frame on the XAU/USD chart also gives an early signal of the price’s bullish trend movement again.
The 1765.00 price zone will be tested again after the market opening earlier this week saw the price make a plunge from the zone.
If the price increase passes the 1765.00 zone, the higher price target of gold is seen to go to the SBR (support become resistance) zone at 1800.00 again.
On the other hand, if the price fails to continue rising, the decline may resume towards the 1700.00 support zone as was the case at the beginning of the week.
The 1700.00-1680.00 zone will be an important zone that determines the direction of further gold price movement.
