Gold investors witnessed aggressive movements in the price of the commodity in yesterday's New York trading session following changes in the US dollar currency.
Having seen Canada's central bank also raise interest rates yesterday as did Australia's central bank on Tuesday, has raised questions as to whether the Federal Reserve (Fed) may also do the same at next week's FOMC meeting.
The US dollar initially moved weakly at the beginning of the New York session, before regaining strength again, pushing gold prices down further until the end of the session.
Price movements are translated on the XAU/USD chart which measures the value of gold against the US dollar.
The initial surge happened until the price reached the level of 1970.00, but the mood changed when the price continued to reverse the direction of making a plunge.
The decline did not stop until 1950.00, and even went lower to around 1940.00.
The price movement is back below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the XAU/USD chart, signaling a bearish trend towards the end of the week.
There is a rebound displayed in the Asian and European sessions today (Thursday), but the price is still below the 1950.00 level.
The level is seen to be the initial resistance to be tested and if the increase continues, the MA50 barrier will be attempted to be broken to signal a change in trend again for gold.
If yesterday's 1970.00 high is successfully overcome, the 1980.00 zone is seen as the main focus for price to return to.
However, if the next trading session shows the pattern of yesterday's price plunge continuing again, the price is likely to go to last week's support around 1932.00.
And the target for a lower gold price drop, the 1900.00 level will be an important level to be tested and the price reaction around that will be observed.
