The past few days have been a gloomy period for gold traders as the asset price is experiencing a downward phase.
Last Wednesday, the price hit a 5-week high of $3,440 before the downward pattern began.
The fall in gold prices continued until the early opening of yesterday's week following positive market sentiment driven by the US-EU trade negotiation agreement reached, also fading the appeal of gold as a safe-haven asset.
Observing the movement of the XAU/USD chart which measures the value of gold against the US dollar, the price has shown a decline to around 3325.00 at the close of last week.
Despite a weak attempt to rise in the Asian session yesterday to around 3345.00, investors maintain expectations for an extended decline following a bearish signal that the price is still below the Moving Average 50 (MA50) resistance line on the 1-hour time frame on the chart.
The decline continued clearly at the beginning of the New York session yesterday until the price almost reached the 3300.00 level before the price movement began to level off until the close of the session.
Gold trading remained flat continuing into the Asian session this morning (Tuesday) until the early opening of the European session below the 3320.00 level.
It is likely that the decline in gold prices will continue after this with the expectation that the 3300.00 level will be broken.
The continuation of the decline in prices will shift to a new target at around 3200.00 if the attraction towards gold fades.
The opposite situation is for the expectation of a rise in gold prices, a rebound that returns above the MA50 barrier will change the previous downward pattern.
The price will recover towards the 3400.00 zone which was successfully achieved during last week's increase, but requires factors that support the attraction towards gold again.
