Gold trading that had shrunk to almost $1,765 at the end of last week has managed to increase its value again due to the movement of the US dollar which was trading gloomy at the opening of the week yesterday.
The king of the currency failed to continue strengthening even though the United States (US) NFP employment data published last Friday recorded a more encouraging reading than expected.
Therefore, investors expect the Federal Reserve (Fed) is likely to make an aggressive interest rate increase of 75 basis points for the third time at this upcoming meeting.
Apart from that, the 10-year bond yield and the dollar index also declined again at the beginning of this week after making significant gains at the end of last week.
Investors' focus will now be directed to the publication of US inflation data on Wednesday and US producer price index data on Thursday which will provide an early insight into policy setting by the Fed.
Pay attention to the price movement on the XAU/USD pair chart which measures the value of gold against the US dollar yesterday, at the opening of the Asian trading session yesterday, the price that moved horizontally above the 1770.00 level began to show a rise again in the European session continuing until the end of the New York session.
The price increase is seen to have broken through the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the XAU/USD chart which shows a bullish trend change signal and failed to continue the downward price pattern at the end of last week.
The continued price movement in the Asian session this morning remained flat in the 1785.00 zone above the MA50 support level where prices are expected to continue increasing in the New York session.
If the price succeeds in continuing to strengthen, the barrier level at 1800.00 will again be the focus to be tested after the price of gold fell below that level since the early trading last July.
The price that managed to continue the surge past the 1800.00 zone will record the latest 6-week high by targeting the next concentration levels such as 1815.00 and 1830.00.
On the other hand, if the decline in the price of gold occurs again, the price is still seen to go down and retest the support zone at 1760.00, which remains restraining the price from experiencing a lower fall as in last week's trading.
However, if the price manages to break through the zone to a lower level, a more obvious decline in price will be expected to reach the RBS (resistance become support) zone of 1740.00 before the price is expected to reach the 1720.00 level which is the focus.
