Gold traded gloomily on Wednesday yesterday with a horizontal and slow price movement for several sessions until resuming the Asian session this morning (Thursday).
Investors are still waiting for a clearer price direction on the XAU/USD chart which measures the value of gold against the US dollar heading into this weekend’s trading.
Risky market sentiment influenced by a report by US President Joe Biden announcing new sanctions against Russia saw the Russia-Ukraine war conflict still tense.
Europe is also still in talks to block Russian coal but has yet to get approval by leaders.
Risk-off sentiment is currently seen to support the appreciation of gold as a safe-haven asset.
However, it was hampered by the strengthening factor of the US dollar after hawkish comments by Federal Reserve (Fed) Deputy Chairman Lael Brainard regarding monetary policy. The FOMC minutes that were the focus earlier this morning also convinced the market for policy tightening by the Fed.
Thus, gold prices failed to rise higher on the XAU/USD chart due to pressure from the strengthening US dollar.
The bearish signal makes investors wary of the fall of gold as the price moves horizontally below the Moving Average 50 (MA50) barrier level in the 1 -hour time frame.
The lower decline is seen heading to the support zone at 1900.00 for a clearer bearish trend of the price.
If the price continues to decline lower beyond the 1900.00 level, the next price target will test the zone around 1870.00.
Yet if the price of gold shows an increase over the weekend, the resistance at 1950.00 will be re -tested like last week’s situation.
If the price manages to pass the resistance, the SBR (support become resistance) zone at 1970.00 will be the focus of the price to be tested.