The situation of falling gold prices is certainly not to the liking of gold investors after placing high hopes for the precious yellow metal to continue to soar.
However, such concerns are likely to occur after market analysts begin to assess that the price of gold will depreciate due to the re -strengthening of the US dollar in the market.
Although US treasury yields have begun to decline from previous 14 -month highs, the US dollar has moved strong driven by risky market sentiment influenced by several recent issues such as President Erdogan's sacking of Turkish central bank governor and sanctions on China over the issue. the human rights of Uighur Muslims.
Based on the price movement on the XAU/USD chart which measures the value of gold against the US dollar, the rise displayed yesterday failed to reach the resistance level of 1745.00 and fell back below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame for a downtrend signal.
Trading the New York session until continuing into the Asian session, the decline is supported at the level of around 1725.00, but the price is still moving below the MA50 barrier level as of the European session.
The lower decline of the price is expected to return to the level of 1720.00 tested last week and if the bearish trend of the price is maintained, the price will hit back to the support level at 1700.00.
On the other hand if the gold price manages to rebound, the resistance level of 1745.00 still needs to be tested before a higher rise will reach last week’s high around 1755.00.
For a bullish trend, the price needs to pass the SBR (support become resistance) zone of 1765.00 first before strengthening the expectation for the price to reach the 1800.00 level again.
