Gold commodity trading is seen as gloomy so far this week, which does not show any drastic movement in tail prices. Investors are wary of market sentiment that is still uncertain after the focus on inflation rates in the United States (US) in data published this week.
The release of US producer price index (PPI) data for July fell to -0.5% versus the 0.2% expectation, making it the first decline recorded for more than 2 years.
Investors are now waiting for clearer guidance on the Federal Reserve's (Fed) base setting whether to continue with the aggressive interest rate hike for a third time by 75 principals, or slow down the rate increase to just 50 by the September meeting.
However, the dollar index and the 10-year US bond yield are seen to be moving erratically due to investors still being wary of current market sentiment.
Tonight's New York trading session will also focus on the publication of US user confidence review data to assess the movement of the US dollar at the close of this week's trading.
Assessing price movements on the XAU/USD chart which measures the value of gold versus the US dollar, it can be seen that prices have failed to maintain a positive range of movements such as the strengthening of the value described earlier this week.
There is an increase in effect, but at a slow rate with a level of 1800.00 it remains a barrier for prices until the end of the week.
Several times the price tried to break the 1800.00 barrier, but the price retreated again with the level of price support seen in the 1785.00 zone.
Continuing with today's trading (Friday), the price is seen to be still moving horizontally and the investor is examining the price reaction on the price barrier of the Moving Average 50 (MA50) on the 1 hour timeframe on the XAU/USD chart to get clues for the next move for gold.
If the price manages to make an increase and break through the 1800.00 resistance level in recent sessions, it is expected that the price will increase to the 1815.00 resistance zone to record a new 6 week high level.
A continued rise higher is likely to also target the next support zone around 1830.00 highs.
On the other hand, if gold loses momentum again, the price decline may be witnessed again with an initial shrinkage below the 1785.00 zone which is still supporting the price for now.
Further downside will test the support zone at 1760.00 which remains the main barrier for prices to make the slide lower as last week's trade.
However, if the price manages to break through this zone, the pedestal will be directed to the RBS (resistance become support) zone of 1740.00 to record its latest 2-week low.
