GOLD Analysis – Gold Recovers Above $3,200, But Can Prices Surpass?

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Gold trading recovered at the opening early this week after experiencing a price drop last Friday as the US dollar showed a recovery.


However, the currency's weakening has opened up space for gold to rise again, as well as the attraction to safe assets has increased again.


This follows a report of a downgrade of the United States (US) government credit rating by the Moody's Ratings firm amid concerns about the country's debt, which has reached $36 trillion.


Investors are also on alert, watching the development of US-China tariff negotiations, which are at risk of faltering again after China announced a 75% tariff on plastic copolymers, including from the US.


Observing the movement of the XAU/USD chart, which measures the value of gold against the US dollar, the price has shown a decline last Friday, approaching the 3153.00 level.


After a slow bounce at the close of last week's session, prices moved higher at the opening of this week, staying above the Moving Average 50 (MA50) support line on the 1-hour chart.


The bullish signal pushed gold prices to around 3250.00 before retreating back to 3206.00.


The slow price movement continued trading at the opening of the European session with a weak increase.


Still holding above the MA50 support line, prices are waiting for clearer clues to push the rise above last Friday's level.


Next, the zone at 3270.00 will be the target to be tested and broken before a clearer bullish signal.


On the other hand, if prices retreat lower again below the 3200.00 zone, the decline is likely to return to the zone reached last week between 3153.00 and 3120.00.


If it continues, the price will record a new 6-week low with the target moving back to the 3000.00 zone.