Gold commodity trading managed to display excellent movements at the beginning of the week as the US dollar continued to weaken and US treasury yields boosted demand.
The dollar index slipped to a four-week low against major currencies and the 10-year US bond yield slid to 2.53%, the weakest in four months.
The reading for the United States (US) manufacturing PMI data from the ISM survey yesterday showed that manufacturing activity in the US contracted slightly but was better than expected in July.
Also giving strength to the yellow metal to continue strengthening is due to economic growth following the Gross Domestic Product (GDP) data of the United States showing contraction in the second quarter.
Pay attention to the price movement on the XAU/USD chart which measures the value of gold against the US dollar in the early trading yesterday (Monday), the price was seen to make a jump after the opening of the European trading session from the support level of 1760.00.
The price was seen reaching a high of around 1774.00 for gold's highest record in the 4-week trading period, but started to flatten around that until the New York session ended.
Continuing in the trading of the Asian session this morning (Tuesday), the price surprised the market with a jump of around 100 pips at the beginning of the session to the height of 1780.00 before shrinking back towards the European session, but still above the support level of the Moving Average 50 (MA50) on the 1 time frame hours on the XAU/USD chart for a still bullish movement signal.
For the expectation of a higher price increase, the barrier level in the 1780.00 zone will be the focus to be reached if the yellow metal asset manages to maintain the strengthening momentum.
If the price manages to break through the barrier level, the price is expected to continue its further rise to the target zone of 1800.00 thus marking the latest 4-week high level.
On the other hand, if the price shows signs of a bearish trend change, the price will shrink back below the 1760.00 zone after passing the MA50 support level and make investors more ready for further price changes.
A lower decline for the gold commodity is expected to target the resistance become support (RBS) zone of 1735.00 before continuing further declines to re-reach last week's price support zone at 1720.00.
