The effect of the decrease in the inflation rate of the United States (US) on the reading of the data published in the New York session yesterday has had a positive effect on commodity trading including gold.
The price of gold has soared to a new 6-month high due to a significant depreciation in the value of the US dollar.
The annual inflation reading for the month of November was at 7.1%, showing a 5th consecutive month of decline. This also strengthens the prediction that interest rate increases will be slowed down by the Federal Reserve (Fed).
Thus, the US dollar has experienced a decline and opened up space for gold to be traded higher.
On the XAU/USD price chart, which measures the value of gold against the US dollar, the price was initially seen to be flat above the 1780.00 zone and then surged through the 1800.00 concentration zone.
The latest high was reached at 1824.00 before the price pulled back to close trade at the end of the New York session flat around 1810.00.
The horizontal movement of the price remains until it continues in the Asian session and the beginning of the European session today (Wednesday).
Giving an impression of the price movement still in a bullish trend when the price remains above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the XAU/USD chart.
Expectations for a continued higher rise, if it surpasses yesterday's highs, will also test the important zone at 1830.00.
After the price breaks through the resistance, the latest target is at the height of 1870.00 to be reached.
However, if a decline occurs, it is likely that the 1800.00 zone will show an attractive price reaction before being evaluated for further movement indicators.
The continued decline is seen to reach the support level at the beginning of the week around 1780.00 before the bearish trend movement will more clearly push the price towards the 1760.00 zone.
