Evaluating to the XAU/USD price chart which measures the value of gold against the USD saw the price decline again after a rise almost to test the resistance zone of 1800.00.
The decline has also failed to break the price resistance trendline to return to decline and continue to move horizontally in the RBS (resistance become support) zone of 1780.00 in the European trading session today (Wednesday).
Be an early indication for a bearish trend where the price movement is seen to have already passed and continue to trade below the Moving Average 50 (MA50) barrier level on the 1 hour time frame.
Investors are increasingly wary of yellow gold trading which is ‘shivering’ in anticipation of the release of important data and tonight’s FOMC meeting that is likely to shake up price movements on the XAU/USD chart.
There are still expectations that the Federal Reserve (Fed) is likely to reduce bond purchases and that factor will be able to ruin the chances of gold prices rising should the US dollar strengthen.
Assuming the Fed sends a clear signal for a larger buying cut, it will totally support the USD to soar and in turn will kick the price of gold down lower.
The expectation of sustaining the lower downtrend is likely to occur if the gold price continues to fall below the RBS 1780.00 zone for the price to head to the next RBS zone around 1760.00.
Yet should the impact of an aggressive strengthening hit the USD to severely push the depreciating price, the support zone at 1740.00 will likely be able to re -test.
However, if the gold price movement is able to maintain the surge as before, the resistance trendline is expected to be torn for the price to reach the resistance zone of 1800.00.
While the peak of the height which is the focus of investors as well as the habit of often restraining the surge around 1813.00 is seen to be once again tested before the price climbs higher.
