Gold commodity trading in the middle of the week was seen to be declining as investors awaited a speech from Federal Reserve (Fed) Chairman Jerome Powell before Congress today for further indications on the central bank’s monetary policy.
The market predicts that the Fed will raise interest rates by 50 basis points at its September meeting and in November by 25 or 50 basis points and an additional 25 basis points in December.
If interest rate hikes continue to be raised for the remainder of the meeting until the end of the year, it is expected that the US dollar has the potential to continue to strengthen against other major currencies in the market.
On the XAU/USD price chart which measures the value of gold against the US dollar, yesterday's European session trading was seen to make a slight increase but did not continue before the market saw a decline in prices again in the New York trading session until the Asian session this morning (Wednesday) around 170 pips decline was recorded.
After the decline was seen to have slipped below the 1830.00 zone, investors also assessed the gold price movement to enter a bearish trend after moving below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame on the XAU/USD chart since the beginning of the week and remained a resistance. on yesterday's hike.
If the decline in prices continues, the price of gold is seen to make the fall more severe and the next price focus will be directed to 1810.00 to be tested again.
In fact, for the lower decline that is still continuing will be expected to reach up to the important support zone for the yellow metal which is at 1800.00 thus recording the latest 5 -week low.
On the other hand, if gold manages to show a recovery, the price that made a rise above the 1830.00 zone back will head back to the resistance zone at 1850.00 to overcome the gains exhibited last week before continuing higher.
A further increase in the price that passes the resistance zone will lead to the target level of 1870.00, which is the price resistance zone that was tested in the previous few weeks' trade which is still successfully broken.
