The movement of the gold commodity examined until the trading session last weekend was seen moving down to the $ 1,700 price zone for a record low level since August 2021.
The US dollar, which drove the change in the value of gold in the market, was seen as unsuccessful in continuing to strengthen at the end of last week after an excellent performance was displayed earlier which was expected to see profit taking activities by investors.
Yet despite a weak move to continue at the opening earlier this week, the US dollar has the potential to rebound with market sentiment still risky and a redirected focus on policy tightening by the Federal Reserve (Fed).
Meanwhile, investors will monitor the release of some important US economic data this week such as unemployment claims as well as US manufacturing and services sector data before the focus shifts to next week’s FOMC meeting.
The Fed is forecast to once again raise interest rates by 75 basis points for the second time in a row as the central bank’s aggressive move in countering the risk of inflation continuing to peak to critical levels.
Note the price movement on the XAU/USD chart which measures the value of gold against the US dollar, the price has been hovering slowly in the 1700.00 zone until last weekend’s trading.
Yet a slight recovery from losses, gold prices were seen rebounding on trading that resumed at the opening of the Asian session this morning (Monday) and continued to continue into the European session to the level of around 1720.00.
The rise is also seen to have managed to break the Moving Average 50 (MA50) barrier level on the 1 -hour time frame on the XAU/USD chart which triggered an early signal for a bullish trend change for gold.
If the uptrend is successful, the price that passes the resistance zone of 17200.00 will then extend the rise to the resistance zone at 1760.00.
For a longer period expectation of bullish price movement, higher upside will reach back to 1785.00 zone or 1800.00 focus zone.
On the other hand, if the price declines again from the level of 1720.00, it is likely that the previous bearish trend will continue and the price will return to the support zone of 1700.00.
The continued lower decline will mark the latest 11 -month low for gold with the next target to hit around the 1680.00 level which is the price support level in March 2021 trading last year.
