The news of a spike in Covid-19 cases in China earlier this week made investors take precautions to be in the market with fears of market sentiment being at risk again.
In addition, investors are also monitoring the warning issued by the World Health Organization (WHO) that the world may need to prepare for a new wave of pandemics.
Gold assets are among those taking advantage of the opportunity in this volatile market environment by continuing to rally higher earlier this week while the US dollar remains trading lower.
Federal Reserve (Fed) officials cast a mixed-tone view of monetary policy projections for the next meeting causing investors to continue to lose confidence in the currency king.
On the XAU/USD price chart which measures the value of gold against the US dollar, the price is seen to be flat at the 1760.00 concentration zone at the beginning of the week before the increase continues again today (Tuesday).
An increase was seen in the European session with the latest high reached at 1784.00 before slightly pulling back again.
The price moving above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the XAU/USD chart still indicates that the price movement continues on a bullish trend.
A higher move is expected for the price towards the 1800.00 concentration zone to record the latest 3-month high after the price last reached the zone in mid-August.
However, if the price starts to decline again, the 1760.00 zone is seen to be tested while a drop below the MA50 support level will be an early indication of a bearish trend change.
The price that dips lower below 1760.00 could possibly head back to around 1720.00 zone.
