The release of US inflation data which recorded an increase as well as the 10 -year US treasury yield which has fallen below the 1.60% level has driven the spike in gold prices.
The anticipation of the Federal Reserve (Fed) on policy tightening as well as the rising US inflation rate also caused investors to turn back to gold trading.
In addition, investors are also expected to scrutinize the US producer price index (PPI) data which will be a reference source to assess further gold price movements.
On the XAU/USD price chart, which measures the value of gold against the USD, it again performed a stunt by recording a drastic jump over 350 pips in Thursday's trading session.
Just after touching the Moving Average (MA50) resistance level on the 1 -hour time frame, the price movement continued to rocket and approached the resistance level that investors were focusing on at 1800.00.
The displayed upside is seen to have trimmed last week’s highs as well as the hardest resistance level to break around 1780.00 to give an early signal of a clearer trend change.
If the rise in gold price successfully continues, the probability of gold price is expected to be able to pass the resistance zone of 1800.00 to re -test the next resistance zone at 1830.00.
The 1830.00 resistance zone is also a strong zone despite being frequently tested and still intact to curb the higher price spike since the July trading session.
However, if the price movement returns to decline, the price movement is likely to test the RBS zone (resistance become support) 1780.00 before declining to lower levels.
If the price continues to decline more severely, the next plunge will see the price plunge back into the RBS 1760.00 zone which is the zone that started the uptrend.
