The 10 -year US treasury yield rebounded to surpass the 1.57% level and indirectly catalyzed the US dollar to show dominance in the market.
In addition, the Evergrande crisis is seen as still haunting investors among the factors that contributed to the strengthening of the USD in reaching a record high of 1 year.
The release of the US NFP ADP employment report data at tonight’s New York session will be the focus of investors to show clues to the US NFP employment data report that will be published on Friday.
On the XAU/USD price chart which measures the value of gold against the USD, the gold price movement has shrunk above 200 pips or $ 20 after the price failed to break the resistance level of 1770.00 to fly higher.
The decline that has been exhibited is also a bit of a hint for the price of gold to return to make a downtrend pattern and is likely to decline to lower levels.
The RBS (resistance become support) zone of 1740.00 remains the main zone to be tested which is the most intact zone in supporting the price spike in the past.
If the lower decline is extended through the RBS zone, a clearer bearish trend movement is seen heading back to last week's lows at around 1720.00.
Yet concerns over rising inflation and higher energy prices are expected to support the movement of gold prices to return to show a surge in prices.
A higher rise is likely to head back to the SBR (support become resistance) zone of 1760.00 where the zone still remains to contain the gold price soaring more aggressively.
Breaking the SBR zone of 1760.00 on a continued rise is expected to drive the gold price movement back to test the SBR zone further at the 1780.00 level which will give an early signal of a clear trend change.
