Are investors increasingly optimistic that the price of gold has started a streak of increasing value?
The question arose when there was an early signal for a change in the price of gold when the surge that occurred at the close of trading in the last session last week was seen to have changed the course of the price.
Japan's intervention once again in the market has had the effect of depreciating the US dollar, and this has also influenced the re-increase in the price of gold in the market.
It can be observed on the XAU/USD price chart that measures the value of gold against the US dollar when there was a significant jump in the New York session last Friday after a declining pattern that was maintained a few weeks before.
After a dip seen to reach 1617.00, the price then managed to surge before closing last week's trading session around the 1655.00 high.
The surge past the resistance at the 1640.00 zone also broke through the Moving Average 50 (MA50) barrier on the 1-hour time frame on the XAU/USD chart, signaling a bullish trend change for gold prices.
However, the rising price pattern failed to continue on Monday yesterday when the price movement was seen to be more horizontal above the 1645.00 level.
Still expecting a bullish move for the price, investors are cautiously awaiting indications of further gold movement.
If the rally continues, the expectation is for gold to reach a height of around 1680.00 first to test the resistance of the last 2 weeks' trade.
Breaking the next resistance will push the price towards the concentration level around 1700.00.
On the other hand, if the price of gold fails to continue its rise and even falls lower below the 1640.00 zone and the MA50 support level, the price is likely to re-enter the support zone at 1615.00.
The continued lower decline is seen to reach the 1600.00 focus support zone while maintaining the previous bearish trend movement.
