Trading for the gold commodity managed to show a surge in the New York session yesterday, but failed to maintain a higher increase until the end of the session due to the reaction to the release of the United States (US) inflation data which was the main focus of the market.
The annual reading of the US consumer price index (CPI) has decreased to 8.5% for July compared to expectations of 8.7% and shows a lower rate of inflation recorded than last May and June.
This situation has eased fears that the Federal Reserve (Fed) will continue to raise interest rates aggressively, but there are also views for the Fed to maintain a rate hike of 75 basis points for the third time in a row.
As expected by Chicago Fed President Charles Evans, he sees the Fed not yet done with interest rate hikes and expects rates to exceed 4%.
Meanwhile, also influencing the movement of gold and being monitored by investors, the dollar index is seen to be still maintaining its decline while the 10-year bond yield is moving flat in today's (Thursday) trading session.
Observing the price movement on the XAU/USD pair chart which measures the value of gold against the US dollar yesterday, the price once again tested the important level of 1800.00 in the New York session yesterday after also reaching that level on Tuesday's rise.
However, the price of gold has not yet shown positive signs of going higher than the 1800.00 level when the price dropped again at the end of the New York session to around 1790.00.
Continuing on today's Asian and European session trading, the movement of gold is seen to be slow and slightly shrinking to the 1785.00 focus zone with a signal for bearish movement when the price has fallen below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the XAU/ USD.
If investors see a decline in the movement of gold until the next session, the price is seen to drop and retest the 1760.00 support zone which remains preventing the price from making a lower plunge like last week's trade.
But if the price succeeds in penetrating the zone, gold's focus will be on the RBS (resistance become support) zone of 1740.00 to test the price before the price is expected to reach the 1720.00 level.
However, if the downward pattern does not continue, instead the price shows an increase again, the 1800.00 zone will still be the main focus of the price after several attempts to rise failed to break through it.
The price that managed to continue strengthening after breaking the 1800.00 zone is seen to target some of the next concentration levels such as 1815.00 and 1830.00 to record gold's latest high level for 6 weeks.
