The precious yellow metal commodity continued to be badly hit by the strengthening factor of the US dollar which is heading into trading this weekend.
The US dollar was seen continuing to appreciate in the New York session yesterday after the release of US services PMI data from the ISM survey which recorded a better -than -expected reading of the decline.
Next the focus has shifted to the issuance of a hawkish FOMC meeting minutes report signaling the Federal Reserve (Fed) will continue its aggressive interest rate hike measures for the upcoming FOMC meeting with concerns over inflation being the main focus.
The Fed is expected to implement a rate hike of around 50 or 75 basis points at its July meeting, and investors are also paying close attention to discussions for a rate hike decision in September.
Thus, with the continued strengthening of the US dollar this has the potential to sink lower gold prices even though gold has an advantage in risk-off market sentiment.
Observing the price movement on the XAU/USD chart which measures the value of gold against the US dollar, the price moved flat in the Asian session yesterday before a more aggressive decline was exhibited in the New York session to continue the price fall on Tuesday.
The price which made a decline of around 4o0 pips yesterday recorded the latest 10 -week low hitting the level of around 1732.00 in the New York session.
The decline was also seen above the December 2021 support level at 1760.00 and continued to give a bearish signal with the price movement remaining below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame.
Yet trading at the end of the New York session continued today (Thursday), the price movement flat and slowing around 1740.00-1745.00, however investors are wary if the price starts moving aggressively in the next session like yesterday’s situation.
If the price continues to decline lower, it is seen that the level around 1720.00 will be the target to be targeted where previously it was a support zone in October and September trading last year as well as recording the latest lows again.
On the other hand, if there is a reversal of the bullish trend, the initial resistance of the price is seen in the 1760.00 zone which will be tested first before the price that continues to bounce higher is likely to reach back to the 1785.00 zone which was the focus of last weekend's trading.
