As analysts had predicted, the $1,800 price level became an important zone for gold trading to be on the pedestal for investors earlier this week.
The XAU/USD price chart which measures the value of gold versus the US dollar has seen prices plunge Monday for the 2022 market opening.
The drop of up to 300 pips has broken the level of 1800.00 and continued on Tuesday's trading last night, this level has become support for gold prices to increase again.
The price increase took effect at the beginning of the New York session overnight following the market reaction to the release of ISM review data for the manufacturing sector in the United States (US) which decreased giving the impression of a depreciation of the US dollar.
This pushed the gold price up from 1800.00 around 160 pips to 1816.00 level, which was the price pedestal zone before this.
The price increase started slowly around the zone before the price remained flat so that towards the end of the New York session it tested the resistance level of the Moving Average 50 (MA50) on the 1 hour timeframe on the XAU/USD chart.
Continuing trading in the Asian session this morning (Wednesday), the price remained flat but slightly increased and started to move above the support level of the 50 Moving Average (MA50) on the 1-hour timeframe for an early sign of a bullish trend.
The price movement is expected to be more aggressive in the New York session soon with the forecast for the upside to re-test the resistance at the level of the high of 1830.00.
Rising higher beyond that level will post a new high for the 6 week trading period possibly heading towards the 1850.00 zone.
On the other hand, if the price decline takes effect, the level of 1800.00 as a support level will continue to be tested, and the decline in releasing it will give a clearer signal for a further fall in the value of gold.
The price decline is expected to reach the RBS (resistance become support) zone of 1790.00 or lower so that the support zone is 1760.00.
