Gold investors are now starting to take a cautious attitude when witnessing changes in the price pattern displayed yesterday.
The current market situation has been influenced by the reaction to the United States (US) inflation data published in the New York session.
Missing forecasts to remain at 3.1%, the US annual inflation reading rose slightly to 3.2% and again supported expectations that the Federal Reserve (Fed) would delay its monetary policy easing.
This has triggered a strengthening of the US dollar and once again put pressure on the movement of gold prices.
Investors closely scrutinize the XAU/USD chart which measures the value of gold against the US dollar.
The streak of continuous price increases in the past week appears to have come to an end as prices are starting to show signs of a trend change.
The highest price increase was reached last Friday around 2195.00 which became the highest record in history.
However, after leveling off at the start of the week, the price started to fall again yesterday and moved below the Moving Average 50 (MA50) barrier line on the 1-hour time frame on the chart which is a bearish signal.
The drop in prices that reacted when the US inflation data was published yesterday continued until the end of the session reaching a level of around 2151.00.
Flat prices continue to trade in the Asian session this morning (Wednesday) around that.
Investors have prepared for a further drop in price which is expected to react at around 2144.00.
Further, lower dips will again target the 2080.00 zone which was the focus of early March trading.
However if the price manages to make a rally past the MA50 barrier again, there is still potential for the price to reach a new record high.
Analysts put the height level at 2200.00 as a focus for the price to reach.
