The trade closed was a bit disappointing for gold investors when the rise in the value of the yellow metal stalled after the market's 'crazy' reaction to the US inflation data published yesterday.
On the XAU/USD price chart which measures the value of gold against the US dollar yesterday, the price made an early decline to retest the 1830.00 focus level during the issuance of inflation data before the gold price rebounded.
The new high was reached around 1842.00 after a jump of 200 pips, however the price plunged again towards the end of the New York session below the level of 1830.00.
Signaling for a reversal of the bearish trend, the price moved back below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame.
As of the European session, the price has slipped around 1821.00 with the price increase seen to test the 1830.00 level as the latest resistance.
With the expectation of a strengthening US dollar that will put pressure on gold trading, the price will continue to decline towards the RBS (resistance become support) zone of 1815.00 before reaching the 1800.00 focus level.
However, if the opposite happens, the price of gold will rebound to continue the bullish trend of the previous week, the level of 1830.00 and the high of 1842.00 that was tested yesterday will likely be able to overcome the price.
For higher gains, the resistance zone at 1850.00-1852.00 will be the focus to be tested after last January’s rise was stranded in that zone.
