The omen is not good for gold investors when the price movement pattern for the yellow metal asset started to turn gloomy today (Wednesday).
Gold traded flat throughout Tuesday yesterday above the $1,900 price level, not reacting aggressively to the United States (US) consumer price index (CPI) data published in the New York session.
The US dollar, which affects the movement of gold prices, remained trading gloomy after the market was hit by fears of the crisis of the collapse of giant US banks.
The CPI data published yesterday is also seen to strengthen expectations for the Federal Reserve (Fed) to retreat again towards the easing of monetary policy.
The XAU/USD price chart, which measures the value of gold against the US dollar, hovered above the 1900.00 level yesterday after successfully breaking through that level on last Monday's surge.
After flat resuming trading in the Asian session this morning (Wednesday), investors began to get restless as price drops began to show in the European session.
The price that dropped below the 1900.00 level is seen starting to move below the Moving Average 50 (MA50) level for the 1-hour time frame movement on the XAU/USD chart, giving an early signal for a trend change.
As previously expected, the drop in price is seen to return to the 1870.00 level, which is the level reached at the close of trading last week.
Continuing the decline lower, the price could reach back to around 1830.00 after the bearish signal is more clearly evaluated by investors.
However, if the price bounces back above the 1900.00 level, it is likely that the bullish price pattern will continue for the price to record the latest high level.
The latest 6-week high will be recorded with the target of the next increase being towards the 1950.00 concentration zone.
