Gold prices displayed bearish action in the European session yesterday after showing indications to move in a bearish trend earlier in the week.
It is likely that investors see the reaction to the depreciation of gold is influenced by the development of positive Russia-Ukraine peace talks and little easing of concerns in the market.
Thus, the attraction of safe-haven assets will begin to diminish in risk-on market sentiment. Yet investors remain vigilant for any possibility.
On the XAU/USD price chart which measures the value of gold against the US dollar, as expected the price has come down testing the support level at 1900.00 in the European session yesterday.
However, the level once again managed to curb the lower decline to push the price back above that level.
The same situation has also occurred in the price decline in mid -March last year during the market reaction to the FOMC meeting.
After the price rose again to the level of 1920.00 at the end of the New York session, the price continued but at a slower pace in the Asian and European session trading today where the price is seen testing the Moving Average 50 (MA50) barrier level in the 1 hour time frame.
If the level continues to prevent the rise in the price of gold, the bearish trend of the price will continue and it is likely that the price may decline back to the support level of 1900.00.
And a further decline in the price that manages to pass that level is then expected to test the concentration level around 1870.00.
On the other hand if the price manages to continue the rise after rebounding from the level of 1900.00 yesterday, the focus is to reach back to the level of 1950.00 which was the focus before.
For a higher increase, the SBR (support become resistance) zone of 1970.00 will be tested before the gold price will target the increase to the level of 2000.00.
