The continued depreciation of the US dollar this week was like a windfall for gold investors as the value of the yellow metal rose again on Tuesday.
The US dollar continues to lose its footing in the market as investors remain cautious as the US Congressional elections take center stage this week and investors also await the release of US inflation data on Thursday.
The situation of continued depreciation of the US dollar, which continued from the impact of the US NFP employment data report last week, continued to be benefited by commodity trading.
If observed, the price movement on the XAU/USD chart which measures the value of gold against the US dollar at the beginning of the week was a little flat after the shock price surge at the end of last week.
Monday saw the price hovering more slowly with the 1680.00 level becoming an obstacle for the price to continue rising.
However, the wall did not wait long to be broken when the gold-powered surge on Tuesday yesterday penetrated the 1680.00 level to reach the high level at 1716.00.
The surge that also broke through the 1700.00 focus zone has also set a new 5-week high.
The surge began to subside at the end of the New York session until it continued into the European session today (Wednesday).
However, investors are not surprised if gold resumes its surge after hopes of gold continue to shine brightly again.
The resistance level at 1720.00 is waiting to be tested and if the price manages to continue its rise past the zone, the price will head towards around 1740.00.
The next higher climb is seen to react to the 1760.00 concentration zone.
However, at any time the price can change direction due to market sentiment which is still uncertain with several factors that can influence the current market pattern.
If the price of gold plunges again, the 1680.00 level is likely to be tested and able to function as a support for the price again after being a resistance for the price before.
A lower drop if it crosses that level is seen to test the 1660.00 zone before returning to the 1640.00 level.
