The price movement on the XAU/USD chart which measures the value of gold against the US dollar was seen to slow at the beginning of the week as investors were wary of trading the yellow metal.
Driven by the change in the value of the US dollar, the price of gold remained moving below the 1745.00 level with the lowest level reaching around 1727.00 in the European session yesterday.
The strengthening of the US dollar last week failed to be sustained at the opening of trading earlier this week which saw US treasury yields decline again.
Market risky sentiment was also seen to affect the change in the value of the US dollar as well as the demand for gold in the market.
After the focus on the sacking of Turkey’s central bank governor by President Erdogan, sanctions by some western countries on Chinese officials over human rights issues against the Uighur Muslim community also made investors wary in the market.
Analysts still see the price of gold moving on a bullish trend but the bullish momentum is fading and investors also need to be vigilant to face the situation of falling gold prices again.
If there is a decline, the initial support level is seen at the level of 1720.00 before the price that continues to decline will return to the support level of 1700.00.
However, if the price manages to jump, last week's high of 1755.00 will be tested before the price goes to the SBR (support become resistance) zone of 1765.00.
The price reaction in the SBR zone will be evaluated by investors and if the price manages to show a signal to continue rising, the price level of 1800.00 is seen to be the main target.
