Gold trades give new clues to yesterday's price action which has shown a reaction to the important $2,000 zone.
While the issue of unrest in the Middle East still affects the movement of gold as a safe-haven asset, the change in the direction of the movement of the US dollar also boosted the yellow metal yesterday.
The strengthening of the US dollar has put pressure on gold to slightly lower as data was published at the start of the New York session yesterday.
Several more series of economic data from the United States (US) will be published in the New York session today before the main focus will be on the FOMC meeting early Thursday morning.
Examining the price movement on the XAU/USD chart which measures the value of gold against the US dollar, the price has shown an increase in the New York session yesterday testing the 2000.00 concentration zone.
The rise managed to reach around the 2007.00 level before plunging significantly to reach the previous focus zone of 1980.00 at the end of the session.
The price plunge that has moved below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the XAU/USD chart is an early signal for a bearish move, making investors wary ahead of the FOMC meeting.
The price leveled off slowly in the 1980.00 zone in the Asian and European sessions today (Wednesday) with the expectation of a drastic move in the next session.
If the price of gold continues to plunge lower, the next focus to be aimed at is the RBS (resistance become support) zone of 1950.00.
If the zone is penetrated, the price of gold will exhibit a bearish movement with the expectation that a larger price drop for gold will occur.
However, if the price manages to bounce back, the MA50 barrier will be tested before the price will try to break through the 2000.00 zone again.
If it manages to miss strongly, a higher increase will record the latest high level for gold before the target towards 2050.00.
