Gold trading again disappointed investors when it showed a significant drop in the New York session yesterday after the restrengthening by the US dollar.
Again putting pressure on gold trading, economic data from the United States (US) was published with encouraging figures.
The final reading of US economic growth for the third quarter posted a higher figure, missing expectations for a hold on the previous reading.
This also follows the reading of US consumer confidence data published last Wednesday which was also positive and beat forecasts.
On the XAU/USD price chart, which measures the value of gold against the US dollar, it has seen a flat price movement since last Wednesday, starting to show a plunge.
In the Asian session until yesterday's European session, the price was initially seen to be flat around 1820.00, but the price started to plunge entering the New York session.
The initial signal for a bearish trend change was assessed by investors when the price moved below the Moving Average 50 (MA50) level on the 1-hour time frame on the XAU/USD chart, until the decline continued until it reached 1785.00.
There is a price rebound after reaching that level to be traded slowly increasing to continue trading on Friday towards the 1800.00 zone.
With the pattern on display, the price of gold is expected to continue its decline lower to break past last week's support level at 1775.00.
Passing that level will further push further down towards the RBS (resistance become support) zone at 1760.00.
However, if the price makes a surge above the 1800.00 level and breaks through the MA50 barrier, watch out for a possible higher move for gold.
If the price makes a higher increase, the resistance zone at 1830.00 is seen to be the target to be tested which is still managed to be touched by the price for this 6 month period.
