Give gold investors an early surprise when the price of the precious yellow metal made a drastic plunge in Monday's trading yesterday to start the opening of 2022 trading.
This is following the US dollar which has begun its strengthening steps triggered by the 10 -year surge in US treasury yields above the 1.60%level.
Investors expect the US dollar to return to its strengthening track with the Federal Reserve (Fed) tightening monetary policy to accelerate the reduction in bond purchases (tapering) as well as expectations for a faster rate hike.
With the strengthening of the US dollar has put pressure on the price of gold which has managed to reach a 5 -week high at the close of 2021 last Friday.
On the XAU/USD price chart which measures the value of gold against the US dollar, the price is seen to have plummeted from the 1830.00 high to the 1800.00 focus level.
The price has moved lower below the Moving Average 50 (MA50) barrier level in the 1 -hour time frame again giving an indication that a bearish trend may be about to begin.
The 1800.00 level is an important zone that will signal the direction of the next price movement, but analysts tend to see the price of gold will continue to decline lower.
The RBS (resistance become support) zone of 1790.00 will be the focus level for the next decline before continuing the bearish trend to the support zone of 1760.00.
Meanwhile, in anticipation of the bullish movement of gold, if the level of 1800.00 manages to push the price back as a support level, the high of 1830.00 as a resistance level will once again be tested to be broken.
The continued higher rise will record the latest 6 -week high with expectations heading towards the 1850.00 zone.
