Gold moved gloomy at the opening of the Asian trading session this morning (Wednesday) after a flat movement throughout Tuesday as investors expected the Federal Reserve (Fed) to continue aggressive interest rate hikes at the September meeting.
Although there are signs that inflation is about to ease and growth is slowing, Richmond Fed President Thomas Barkin stated that the Fed needs to rein in aggressive hikes until inflation falls steadily within the target range for a significant period.
These investors are looking forward to the release of the United States (US) retail sales data which is predicted to contract slightly in July and the release of the FOMC meeting minutes report early Thursday morning which will provide new indications for the next interest rate hike.
Judging by the price movement on the XAU/USD chart which measures the value of gold against the US dollar, the price was seen to be showing a more flat pattern on Tuesday than the dip shown at the beginning of the week.
As of yesterday's New York session, the price is hovering around the 1772.00 level which is the lowest level for gold for the week with investors still assessing the bearish signal for the movement of gold which is below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the XAU/ the USD.
Continuing on this morning's Asian trading session (Wednesday), a slight surge in price was displayed testing the MA50 barrier level before starting to retreat again to make a decline in the European session.
The price drop if continued will record the latest weekly low again with the expectation of heading to the price support zone at 1760.00.
For a lower drop for the price to continue the movement on the bearish trend, passing the 1760.00 zone will push the price towards the RBS (resistance become support) 1740.00 zone before the next target is at the concentration level of 1720.00.
On the other hand, if the price manages to show a rebound and break through the MA50 barrier, the move higher will re-target at the 1800.00 resistance zone.
