As if giving early hope, gold continued to disappoint investors yesterday when the value of the asset plunged again in the New York session after the price increase displayed in the previous sessions.
The US dollar was initially a bit passive, opening up space for the price of gold to rise, but the re-strengthening of the king of the currency put pressure on the price of gold to decline again.
This can be seen on the XAU/USD price chart which measures the value of gold against the US dollar yesterday when the price started to rise from the beginning of the Asian session at the level of 1623.00 testing the 1640.00 zone which as expected will be the focus.
However, the SBR (support become resistance) zone was clearly an obstacle for gold to rise higher before the trade towards the end of the New York session witnessed a decline back to around 1627.00.
When the price dropped again from the 1640.00 zone, the price was also seen to be back below the barrier level of the Moving Average 50 (MA50) on the 1-hour time frame on the XAU/USD chart, signaling a bearish movement for gold.
Lower declines were seen in trading continuing into the Asian session this morning (Friday) to the 1620.00 zone and there was a slight early bounce in the European session after a reaction to the key zone as analysts had previously expected.
If the decline continues lower then it is seen that it will reach the concentration level at 1600.00 while recording the latest lowest level in 2 years.
On the other hand, if there is a rebound in gold prices from the 1620.00 zone, the MA50 barrier will be tested before the price returns to the SBR 1640.00 zone.
A higher jump with a bullish trend change signal for gold will push the price expectation to rise up to around 1680.00.
