Looking at the XAU/USD price chart which measures the value of gold against the USD it seems to have failed to last long above the 1800.00 level and again fell sharply beyond 200 pips of price decline.
The price movement is also seen to have moved below the resistance level of Moving Average 50 (MA50) to decline to the RBS zone (resistance become support) 1780.00 to give an early signal of a bearish trend.
However, the RBS zone appears to have re -supported the price spike at the end of the session before re -hitting the European session entering the New York session today (Wednesday).
Important economic data to measure consumer confidence in the United States (US) which recorded a rate of increase indirectly continued to influence the strengthening factor to the USD.
Due to that factor, it has resulted in the excellent performance exhibited by the price of gold began to fade and in turn gave room for the USD to strengthen towards the end of October.
Various factors need to be taken into account following the inflation rate which is seen to be still rising as well as the fall in US treasury yields for 10 years as well as the high probability of profit taking activities (profit taking).
If the RBS 1780.00 zone is no longer able to return to support the price spike, the RBS zone at 1760.00 is expected to be the focus zone for investors to assess the reaction of the next movement.
The bearish pattern is also likely to give an early signal of a change in the bearish trend for investors to be prepared for the expectation that gold prices will record a more severe fall.
On the other hand if the gold price movement manages to record an aggressive surge, the resistance zone of 1800.00 is expected to be retested before flying high towards the highs around 1813.00.
