Gold traded lower at the market open early last week, disappointing investors with a dismal performance for the start of 2024.
Coupled with the strengthening factor of the US dollar that has continued since the close of trading at the end of 2023 added to the pressure on the movement of the precious commodity.
Last Friday, drastic price movements were observed during the reaction to the United States (US) NFP employment data published for the month of December.
Examining the XAU/USD chart which measures the value of gold against the US dollar, the price is seen to have fallen below the 2070.00 level at the close of 2023.
The decline in prices continued at the opening of 2024 at the beginning of last week saw the price plunge past the important level at 2050.00 and hit the 2030.00 zone on Tuesday.
The horizontal price movement below 2050.00 that was seen was also price tested before there was a price fluctuation in a large range during the NFP data on Friday.
The price was pushed down initially to the level of 2025.00 before rising again to the level of 2064.00.
However, the price did not continue to rise higher but instead retreated back down and closed trading below the 2050.00 level in the last session of the week.
Trading continued at the opening of the beginning of this week saw the price of gold drop further to the 2030.00 zone until the beginning of the European session.
Price movement below the Moving Average 50 (MA50) barrier line on the 1-hour time frame on the XAU/USD chart indicates a tendency for the bearish movement to continue for gold.
If the price breaks lower and penetrates the 2030.00 zone, the price is expected to reach the important concentration level at 2000.00.
And it is not impossible that the decline could continue if the strengthening situation of the US dollar continues.
However, anything could happen with market volatility this week ahead of the release of US inflation data.
If the price of gold manages to show an increase again, the level of 2050.00 will be the initial resistance to be overcome.
A successful break above that level will push the price higher to around 2070.00 to 2080.00.
