Gold trading did not show an attractive price reaction when the focus was on the speech by Federal Reserve (Fed) Chairman Jerome Powell at the New York session yesterday.
This is due to the flat movement of the US dollar as investors did not get any indication of the central bank's monetary policy when Powell did not touch on the matter in his speech at the symposium event in Stockholm yesterday.
Thus, it also affects the movement of the gold value which is also flat above the $1,870 price zone.
Examining the XAU/USD price chart which measures the value of gold against the US dollar, the price is hovering above the 1870.00 level with the highest level reached at the beginning of the week being around 1880.00.
Although it is seen not to continue the surge that occurred at the end of last week, the price of gold is still holding on from experiencing a decline below the 1870.00 level.
In addition to crossing above the 1870.00 level, the price is also supported by the Moving Average 50 (MA50) support level on the movement in the 1-hour time frame of the XAU/USD chart which gives a bullish signal.
Continuing the trade up to today's (Wednesday) European session, the price increase is displayed although at a slow tempo, the price tries to break through the 1880.00 zone.
A higher move aims for gold to reach 1900.00 at the same time setting a new 8-month high.
However, the price plunge can happen again especially when the reaction to the release of US inflation data has the potential to change the direction of gold price movement.
If it is also below 1870.00, the price is likely to drop back towards the support level of 1830.00 which is in the RBS (resistance become support) zone.
A lower drop after displaying a more clear bearish trend will expect the price to reach the 1800.00 level again.
