There was a glimmer of hope for gold investors at the end of the week as the precious commodity began to show a surge in value after a dismal performance earlier in the week.
This increase is the effect of the depreciation of the US dollar that occurred in the market in the New York session yesterday and opened the way for gold to recover its performance again.
If you look at the XAU/USD price chart which measures the value of gold against the US dollar, there was a significant jump in the price in the New York session yesterday and gave an early signal of a trend change.
The price initially made a decline at the level of 1615.00 before the price surge managed to break through the resistance tested last Tuesday which is the 1640.00 zone.
The increase that was displayed also crossed the Moving Average 50 (MA50) barrier in the 1-hour time frame, indicating that a change in the bullish trend is about to occur.
As analysts expect if the price of gold makes an increase, the SBR (support become resistance) zone of 1660.00 will be the focus of testing at the end of the New York session.
However, continuing on today's trading (Thursday), the price drop was exhibited again since the Asian session continued to the European session towards the concentration level of 1640.00 again.
If the 1640.00 zone becomes the latest support for the gold price and the decline does not cross the MA50, it is possible that the price can make a rally again to resume yesterday's surge pattern.
The price of gold if it makes an increase past the SBR zone of 1660.00 can reach back to the resistance zone of last week at 1680.00.
On the other hand, if the price decline fails to be contained, crossing the 1640.00 zone and breaking through the MA50 support will be a bearish signal for investors to be alert for a further fall in the value of gold in the market.
Expectations for a continued decline will return to around the lowest level reached yesterday, and if it is successfully passed, the price is seen to be heading towards the 1600.00 concentration zone.
