Gold depreciated to around $40 in Tuesday's trade yesterday as the market reacted to statements by Federal Reserve (Fed) Chairman Jerome Powell in the presentation of the monetary policy report.
The hawkish signal by Powell for policy setting by the Fed has prompted the strengthening of the US dollar and pressured the value of gold to fall significantly in the New York session.
It is expected that gold will continue to fall in the lead up to the publication of the United States (US) NFP employment data report at the end of the week.
On the XAU/USD chart that measures the value of gold against the US dollar, the price has fallen from the 1850.00 level to the 1812.00 level.
Investors have already started preparing in the European session yesterday as the price moved below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the XAU/USD chart.
The drop in price is seen to retest the previous week's support level around 1805.00 before reaching the 1800.00 support zone.
The continuation of the price drop is seen to be headed around 1780.00 first before continuing down to the previous focus target at 1760.00.
However if the price shows a rebound, the 1830.00 level is the closest it will be tested before the price will try to break the MA50 barrier again.
Successfully crossing to a higher level will signal a change in the bullish trend again for gold and will challenge the height reached at the beginning of the week around 1850.00.
