Looking at the XAU/USD price chart which measures the value of gold against the USD, it is seen to also perform a plunge until it breaks the RBS zone (resistance become support) at 1780.00.
The plunge showed that the gold price movement was still unable to stay in the resistance zone of 1800.00 and further plunged close to 300 pips at the close of October trading.
Nevertheless, the price seemed to climb back up again at the end of the session to close Friday’s trade above the 1780.00 level before continuing a slight surge at the November market opening.
It is not impossible for the possibility of profit taking activities that have driven the USD back to strengthen and have been supported by several factors.
Important USD-related data to be published this week as well as the US NFP employment data report will also be an assessment for investors to see the next direction of gold.
However, concerns over the weak economic growth rate are expected to be a key factor that is likely to give little benefit to gold trading to rebound.
Assuming the USD continues to put pressure on gold prices to decline lower, the RBS 1780.00 zone is likely to be breached again and expectations will be able to head to the RBS 1760.00 zone as well.
The decline to the lowest RBS zone will also show the movement of the price of gold to give a more pronounced shadow to make a change in the bearish trend.
Meanwhile, if the gold price regains support to rise again, the resistance zone of 1800.00 is seen to be re -tested before displaying more extreme movements.
