Risky market sentiment had previously made the gold commodity move gloomy against the US dollar, while the currency king managed to continue strengthening after the release of the United States (US) service data ISM survey which rose more than expected in the New York session yesterday.
Market concerns began to ease after House Speaker Nancy Pelosi flew out of Taiwan without incident even as tensions between the US and China were seen rising again.
Investors are also on guard awaiting the publication of the US NFP jobs data report at the end of the trading week on Friday tomorrow.
Also focused on expectations for the FOMC meeting in September is the possibility that the Federal Reserve (Fed) will raise 75 basis points for the third time, to continue aggressive tightening measures based on the views of several Fed officials.
Look at the price movement on the XAU/USD chart which measures the value of gold against the US dollar in yesterday's trade, the price hovered above the 1760.00 support zone with the price increase just testing the height level around 1772.00.
The price is also seen to be hindered by the Moving Average 50 (MA50) level on the 1-hour time frame which investors evaluate as a signal for a change in the direction of price movement.
The price that shrank to the 1760.00 zone in the New York session yesterday was seen to bounce back until the increase continued higher in the Asian trading session this morning (Thursday).
Continuing on the trading of the European session, the price is seen to have successfully broken through the MA50 barrier level and also surpassed the height reached on Wednesday yesterday to hover around the 1774.00 level as of 4pm local time.
If the price manages to sustain a higher increase, the resistance zone at the 1785.00 zone will be tested again after the rise in gold prices last Tuesday failed to break through to higher levels after recording the latest 4-week high.
If the barrier is also successfully broken through, the price is expected to continue increasing up to the target zone of 1800.00 which was the focus of gold trading before.
As for the expected decrease in gold prices, the support zone at 1760.00 will be the focus to be tested and penetrated before investors are ready after evaluating the bearish movement signals that are clearer.
A lower decline for the yellow metal is expected to be directed towards the resistance become support (RBS) zone of 1735.00 and 1720.00 for the price decline pattern to continue.
