Remaining with a dismal performance, gold commodity trading extended its decline to the $1,760 price level as investors focused on the publication of the minutes of the FOMC meeting in the New York session early this morning.
The yellow metal is seen hovering at the lowest level in two weeks with a lackluster reaction following the publication of the minutes which indicated that the Federal Reserve (Fed) will continue to tighten monetary policy, but with the possibility of slowing the increase in interest rates until reaching the central bank's inflation target.
The Fed did not provide any specific guidance for future hikes as it will depend on the data to be released, but the market sees a 60% probability of a 50 basis point rate hike by the Fed at the September meeting.
Although gold is seen as a hedge asset against inflation, the yellow metal asset tends to decline following interest rate hikes implemented by the Fed.
Examining the price movement on the XAU/USD pair chart which measures the value of gold against the US dollar, the price is seen to continue its downward momentum to a lower level on Wednesday yesterday compared to last Tuesday which was more horizontal above the 1770.00 zone.
In the Asian session yesterday, the price was seen showing a slight increase testing the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the XAU/USD chart, but failed to break through the barrier and shrank around 200 pips.
Continuing on today's trading (Thursday), the price still remained flat above the 1760.00 zone from the Asian session continuing to the beginning of the European session.
If the downward pattern continues, the price is likely to pass the support zone of 1760.00 and drop lower towards the RBS (resistance become support) zone of 1740.00.
For targets for further declines, the 1720.00 zone will be waiting to be tested by the latest 3-week low.
However, if the 1760.00 zone succeeds in supporting the price again to start a surge, it is expected that the price increase will lead to the SBR (support become resistance) zone of 1780.00 after passing the MA50 barrier with the initial signal of a change in the bullish trend for gold.
The continued price surge looks set to retarget at the key resistance level at 1800.00 after that level remained in the way of bullish attempts over the past week.
