Finally, gold trading has returned to a clear pace after the release of the US producer data index (PPI) report recorded the highest reading, thus exceeding expectations.
Yet the data reading has made the greenback dollar strong again but high inflationary pressures may prompt the Federal Reserve (Fed) to accelerate its tapering move earlier.
But the focus ahead of the FOMC meeting for the Fed to meet those expectations is likely to be more focused on U.S. retail sales data in tonight's New York session.
The price movement on the XAU/USD chart which measures the value of gold against the USD has seen a significant pace with an aggressive decline of over 200 pips in yesterday’s (Tuesday) trading session.
The bottom line is that the price decline is also seen as an attempt to hit the support zone of 1760.00 to continue to the European session today (Wednesday) to once again track the zone.
The price also seems to be retesting the trendline resistance but the price has already moved below the Moving Average 50 (MA50) resistance level in the 1 hour timeframe for the bearish trend signal.
Therefore, the 1760.00 support zone remains the focus zone to be targeted if the price continues to show a decline and higher pressure is likely to push the price further down.
The next decline is likely to push the price movement to create the latest lows again which is expected to re -test the support zone witnessed at 1740.00.
Assuming that the price again benefits from increased inflationary pressures, then the SBR (support become resistance) zone of 1780.00 will likely be tested if the price records a surge again.
A more aggressive surge will see the price move to the SBR 1800.00 zone which is often considered a resistance at the end of November trading.
