Will the price of gold fall to $1,900 again?
The question arises following the bearish pattern displayed by gold trading throughout the week.
The encouraging weekly performance by the US dollar is seen to put pressure on gold for a recovery.
On the other hand, the situation becomes worse when the price has already started to plunge below the $2,000 level.
Looking at the XAU/USD chart which measures the value of gold against the US dollar this week, the price has fallen below the 2000.00 level last Tuesday.
The decline continued until yesterday's New York session almost touching the 1950.00 level when the economic data of the United States (US) was published positively.
The price movement still remains below the Moving Average 50 (MA50) barrier on the 1-hour time frame on the XAU/USD chart, showing that the trend is still bearish.
But at the end of the week, gains were seen in today's Asian and European sessions from the 1950.00 zone and are seen to test the MA50 barrier.
If successfully crossed, it will be an early signal for the start of a bullish pattern and push the price to climb back to the previous important level of 2000.00.
An attractive price reaction will be displayed around that and investors will examine the indicators for further movement.
However, if the price resumes its decline, the 1950.00 zone is likely to be breached before the latest low is recorded again.
Thus, the next target for a lower drop is to head towards the 1900.00 zone.
