The jump in price expected by gold investors did not seem to happen at the beginning of the week yesterday, instead the value of the yellow metal declined again when it resumed trading today (Tuesday).
In the past week, the strengthening factor of the US dollar has pressured the price of gold to fall after the price initially fell below the $2,000 level.
But at the end of the week, the Chairman of the Federal Reserve (Fed) Jerome Powell became a savior when his statement about monetary policy was dovish, and weakened the US dollar.
Therefore, the price of gold jumped back at the end of last week, but fell back again at the beginning of this week.
Fed President James Bullard came out with his hawkish view yesterday, stating that the central bank still needs several more interest rate hikes this year.
This has limited the depreciation of the US dollar and investors are also cautiously watching the current developments in the debt ceiling issue in the US.
Price movements are translated on the XAU/USD chart which measures the value of gold against the US dollar.
After the price dropped below the 2000.00 level, the price dropped until it almost reached the 1950.00 level before bouncing back to around 1983.00.
The surge has crossed the Moving Average 50 (MA50) barrier on the 1-hour time frame on the chart giving an early indication of a trend reversal.
But the surge didn't happen yesterday before a decline took place in today's trade heading back to the 1950.00 level.
The bearish price pattern of last week is likely to continue if the price manages to fall lower and penetrate the 1950.00 price support zone.
The continued decline will aim to touch around 1900.00 which was also the focus of the price before.
However, if the price manages to bounce back from the 1950.00 zone, the MA50 barrier needs to be crossed to signal that the price increase is about to begin.
Next, the price will reach the 2000.00 level again in addition to continuing a more clear bullish movement.
