Investors didn't have time to celebrate when the price of gold soared last Tuesday when towards the end of the week, the gains were lost overnight.
This situation is driven by the impact of changes in the trading value of the US dollar which moves inversely for gold assets.
In retrospect, the surge in gold last Tuesday was due to the depreciation of the US dollar when the inflation data of the United States (US) was published for 5 consecutive months.
In line with the forecast for the results of the FOMC meeting when the rate hike has been increased to 50 basis points, indicating a slower pace of rate hikes.
However, the situation changed when the market digested hawkish comments by the Chairman of the Federal Reserve (Fed) who hinted at policy tightening next year.
Thus, the strengthening of the US dollar has again seen the fall in the price of gold to a lower level compared to the surge level during the day.
On the XAU/USD price chart which measures the value of gold against the US dollar, the price has managed to reach a height of around 1824.00 last Tuesday for a 6-month high price record.
However, the price of gold has plunged again after the reaction to the FOMC meeting to a level around 1775.00 on Thursday yesterday.
Horizontal price movement around that for several sessions until the European session today (Friday).
The price is likely to be seen tending to continue its decline lower after the price movement is below the Moving Average 50 (MA50) barrier on the 1-hour time frame on the XAU/USD chart.
The continued decline is expected to reach around 1760.00 for the price to test the RBS (resistance become support) zone.
If the zone is broken, the price can reach up to around 1740.00 which is seen as a support level for the price.
On the other hand, if the bullish pattern is displayed, the rise is seen to be heading towards the focus zone at 1800.00 for investors to assess if there is an indication of a trend change.
A move higher will retarget at the 1830.00 zone and the highs reached last Tuesday are likely to be overcome.
