Gold commodity trading retreated from strengthening due to the United States (US) NFP employment data published at the end of last week has prompted strengthening against the US dollar currency.
In the US, job gains in July rose to 528,000, beating market expectations and the biggest increase since February.
Meanwhile, the US unemployment rate also dropped to 3.5% compared to expectations to remain at 3.6% while average hourly earnings in the US also recorded an increase.
Therefore, investors are once again placing expectations for the Federal Reserve (Fed) to continue raising interest rates aggressively as before with an increase of 75 basis points for the third time in a row for the latest meeting.
In addition, the 10-year US treasury yield also managed to increase to a level of 2.870% after the release of US employment data which strengthened and the dollar index was also seen to rise until the close of the New York trading session last Friday.
Expectations for the strengthening of the US dollar after this will lead to increased pressure on the movement of gold in the market.
Looking at the price movement on the XAU/USD price chart which measures the value of gold against the US dollar, the price has shown a decline again in last Friday's trading due to the impact of the NFP data, ending the bullish pattern displayed earlier.
The price had previously shown an increase towards the 1800.00 concentration level, but after touching the level around 1794.00, the price has plunged again under the strengthening pressure of the US dollar in the last trading session last week.
The price drop is seen to have reached around 1764.00 and has broken through the Moving Average 50 (MA50) support level on the 1 hour time frame on the XAU/USD chart giving a bearish signal again for further gold movement.
The price movement that continued at the market opening earlier this week remains flat below the MA50 barrier and is expected to be more active in the New York session shortly.
If the price decline continues, the price will test the support zone at 1760.00 after the zone managed to stop the price from falling lower last week.
However, if the price continues to decline beyond that zone, a lower fall for the yellow metal is expected to drop to the RBS (resistance become support) zone of 1740.00 before the next expectation to reach the 1720.00 level which is the focus.
On the other hand, if the price successfully jumps in the early trading this week, some important zones will be monitored by investors who will test the price such as the 1785.00 zone and then the important resistance zone of 1800.00
After a clearer bullish trend change signal, the price will record the latest 6-week high, targeting 1815.00 and 1830.00 for continued upside.
