Gold trades are still flat at the start of the week driven by gloomy movements in the US dollar as investors remain cautious ahead of this week's FOMC policy meeting.
After being detailed with inflation data that continued to increase in June to the latest highest level since 40 years, the pressure continues to be felt by the Federal Reserve (Fed) to act to extend the aggressive increase step for the second time by 75 basis points at this meeting.
In the meantime, investors will look forward to the release of the United States (US) economic growth data on Thursday which will give an indication of whether the economy is heading towards recession or vice versa.
On the XAU/USD price chart which measures the value of gold against the US dollar, trading in the Asian session yesterday saw the price making an increase connected to the European session reaching a high level of 1736.00 before shrinking again connected to the New York session around 200 pips below the level of 1720.00 again.
In fact, the price has also crossed below the support level of the Moving Average 50 (MA50) in the 1-hour time frame to signal a bearish movement for gold, but the price is still hovering at the MA50 level in trading that continues today (Tuesday) above the 1720.00 level.
For the expected decline in gold prices, passing the important level of 1720.00 will expect the decline to be extended to the 1700.00 zone which is seen to be the initial focus before going to a lower level.
Next, gold's lower decline is expected to head towards the support zone at 1680.00 after last week's decline failed to continue the lower decline past it.
On the other hand, if the price of gold shows an increasing pattern, the increase from the 1720.00 zone will go to the 1760.00 barrier level to be tested after overcoming the high level reached last Friday.
And for higher price increases, further increases in the yellow metal are expected to test the 1785.00 zone before heading to the 1800.00 concentration zone.
