GOLD Analysis – Gold Soars to $2,070 But Pulls Back


 Gold trading at the close of last week successfully ended with an excellent performance when the price managed to touch the expected level of $2,070.

The factor that pushed the increase to happen was the depreciation of the US dollar currency caused by the release of gloomy economic data from the United States (US).

The latest reading of third-quarter US economic growth declined and US consumer spending index data was also lower than forecast.

This again added pressure to the US dollar and increased expectations for the Federal Reserve (Fed) to move towards easing monetary policy.

Then the situation has also given an advantage to gold which finally saw the price rise successfully surpassing its resistance level.

On the XAU/USD chart which measures the value of gold against the US dollar, the price is seen to be blocked at the 2050.00 level until it was finally broken through on the rise last Friday.

The rise continued towards the expected level of 2070.00, but as soon as the price touched that important level, the decline resumed.

The price retreated back to around 2050.00 before the price that resumed trading on Tuesday rose slightly to head back to the 2070 level.

The price movement is still bullish moving above the Moving Average 50 (MA50) support line on the 1-hour time frame on the XAU/USD chart.

If the price increase continues to exceed the 2070.00 level, the 2080.00 level is likely to be exceeded.

Or will the price touch back to the all-time high around 2144.00 reached in early December?

A drop in the price if it sinks back below the 2050.00 level will make investors wary of gold falling further below.

The decline could continue to around 2030.00 or even lower to the concentration zone at 2000.00.