Gold trading seems to continue its ‘violent’ action by making gains of more than 100 pips in the trading session (Monday) to approach the latest highs reached last Friday.
The price spike factor is seen to have been supported by the decline in US treasury yields 10 years after reaching the latest highs last week as well as high inflationary pressures making investors more attracted to gold.
However, the strengthening of the USD, which is currently on display, seems to have been a major factor in preventing and stifling gold prices from soaring higher.
Looking at the XAU/USD price chart which measures the value of gold against the USD, it is seen to continue to rise until it almost reached the high of 1813.00 before closing above the resistance zone of 1800.00.
The gold price movement seems to remain traded above the resistance level of the Moving Average 50 (MA50) on the 1 -hour time frame to give an indication of the movement still with a bullish trend.
The price trend was also seen slightly flat at the end of the session before returning to show a decline and reaching MA50 at the opening of today's trading session (Tuesday) to continue to the European session.
If the 1800.00 resistance zone succeeds in helping the gold price maintain its rise, the 1813.00 high is likely to be tested first before the expectation of a stronger rise.
Most analysts expect that the 1830.00 resistance zone is expected to be reached again where the zone has always suppressed the price spike since the July trading session again.
The higher the rise continues on the more obvious bullish trend for gold, the price is likely to potentially reach back up to the 1850.00 focus level.
If the price movement is cut back to break the resistance zone of 1800.00, it is very likely that investors will see the price of gold retrace the RBS (resistance become support) zone of 1780.00.
The decline will also indirectly show the price of gold is able to plunge lower and in turn give an early signal for the price to make a change in the bearish trend.
