After moving flat last week, gold prices opened higher at the opening early this week as the world’s attention is focused on the conflict in the Middle East.
As is well known, the United States (US) officially stepped into the war zone by attacking Iran’s nuclear facilities, signaling support for Israel.
The situation is getting worse with Iran ignoring President Donald Trump’s warning to end the war, instead a new round of attacks on Tel Aviv continued.
Gold as a safe-haven asset opened high near $3,400 but showed a decline towards the end of the Asian session.
Examining the movement of the XAU/USD chart which measures the value of gold against the US dollar, the price showed a slow movement and dropped to 3340.00 on Friday trading.
After closing the last session of the week slightly higher at around 3368.00, the price even opened higher at 3392.00 in the Asian session this morning after the war situation heated up over the weekend.
The price showed a decline again to around 3350.00 and was flat in European trading.
The price movement below the Moving Average 50 (MA50) resistance line on the 1-hour time frame on the XAU/USD chart made investors cautious to prepare for a price drop.
However, if the war situation escalates, the gold price has the potential to move higher and surpass the opening level early this morning.
The target is to surpass the important zone at 3400.00 and then challenge the high level reached last week.
On the other hand, if the gold price continues to decline beyond the level reached last week, further price declines may occur.
The price could fall back to the 3300.00 focus zone which is seen as the nearest support area for the price.
