Gold trade was mixed at the start of the week showing a lackluster performance for the early May opening yesterday.
At first, gold recorded an increase in value until it crossed the $2,000 level, but then fell back below that level.
This is due to the strengthening of the US dollar in the New York session following the release of good ISM survey data of the manufacturing sector in the United States (US).
The strengthening of the US dollar dampened the initial surge in gold displayed in the previous session.
If observed on the XAU/USD price chart which measures the value of gold against the US dollar, the price is seen to have made a jump from the level of 1977.00 to pass the level of 2000.00.
Touching a high of around 2006.00, the price again exhibited a dive back up to the level of around 1980.00 at the end of the New York session.
The drop that pushed the price to hover again below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the XAU/USD chart, gives an early indication for the price to continue the bearish movement.
However, anything could happen ahead of the FOMC meeting early Thursday morning, with the market expecting a 25 basis point interest rate hike by the Federal Reserve (Fed).
If the price of gold continues its downward trend today, it is likely that a new low will be recorded after the price has surpassed the levels of the previous weeks.
A further drop in price is seen to lead to a concentration level around 1950.00.
However, if the situation changes and sees the price jump again, the 2000.00 level will still remain an important wall for the price to break through.
If it succeeds in breaking through, then investors will be more optimistic about setting the target for the price of gold to rise to a higher level.
The increase that succeeded in reaching the 2030.00 zone will next target 2050.00 to be tested and penetrated.
