The movement of gold prices since the beginning of the week until Wednesday yesterday remained flat above the $1,870 price zone as investors were still cautiously awaiting the release of inflation data from the United States (US).
This is because the important data that will influence the Federal Reserve's (Fed) monetary policy decision will drive the movement of the US dollar currency, and in turn will also affect the change in the value of gold in the market.
If inflation declines and prompts a depreciation of the US dollar, gold has the potential to post higher appreciation.
On the XAU/USD price chart which measures the value of gold against the US dollar, there is an increase displayed until it reaches the level of 1885.00.
However, the rising pattern could not be maintained when the price of gold fell back to the support level of 1870.00 before rebounding.
Following the opening of trading in the early Asian session this morning at around 1875.00, prices rose slightly to retest the highs reached yesterday before slowing below the 1885.00 zone in the early European session.
The price moving above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the XAU/USD chart gives an early signal for a change in the bullish trend, but the price is still seen moving in the horizontal zone.
If the rise in gold prices continues today, investors are aiming for the price to reach up to 1900.00 which is seen to be the latest resistance level.
If the price remains above the 1900.00 level, the increase will continue with the next target being at the height of 1950.00.
However, if the price of gold plunges following the reaction to the published inflation data, passing the current support of 1870.00 will push the price back to the RBS (resistance become support) zone of 1830.00.
The price can fall back to the concentration level of 1800.00 if it clearly shows a bearish movement pattern again.
