The decline in US 10 -year treasury yields that pushed for the depreciation of the US dollar has opened the way for gold trading to rebound yesterday.
If one examines the price movement on the XAU/USD chart which measures the value of gold against the US dollar, the price has shown a positive movement in the European session yesterday to the end of the New York session with a bullish pattern exhibited.
Gold investors breathed a sigh of relief as gold withstood from continuing the fall after being driven by US bond yields which had made a decline after peaking earlier this week to 3.00% then declining again below that level.
Investors are increasingly wary of US inflation data to be released this Friday and slowing global growth amid aggressive tightening from major central banks.
On top of that, a world bank report that has lowered its global GDP forecast this year to 2.9% from 4.1% could cause some countries to plunge into a debt crisis as seen in the 1980s.
These factors are monitored by investors who are seen to be able to influence changes in the current value of gold in the market.
Gold has recorded a daily gain of around 180 pips yesterday making the yellow metal retest the 1850.00 barrier zone.
If the bullish pattern is still maintained, the price is seen to test the resistance zone at 1870.00 which is an important resistance tested for 2 consecutive weeks before this.
A higher rise past the zone will record the latest highest price of gold for a period of 5 weeks with the next target to head towards the 1900.00 zone.
On the other hand, if the price of gold makes a decline, the bearish trend of the price is likely to continue and the RBS zone (resistance become support) 1830.00 will be tested again.
Successfully passing that zone will push the price of gold to record the latest 3 -week lows.
