Gold traded lower in the Asian session yesterday (Tuesday) following the strengthening shown again by the US dollar.
Pressing the price of gold fell, the strengthening of the US dollar was driven by a hawkish view by the President of the Federal Reserve (Fed) St. Louis James Bullard said the central bank still needs to raise interest rates several more times this year.
This is contrary to the statement delivered by Fed Chairman Jerome Powell last Friday which was more dovish.
The US dollar then again moved weakly in the New York session yesterday following the market's reaction to the United States (US) manufacturing and services PMI data that was published mixed.
Examining the price on the XAU/USD chart which measures the value of gold against the US dollar yesterday saw the price drop to around 1955.00 first before rebounding in price.
The rise that continued until the end of the New York session has crossed the Moving Average 50 (MA50) barrier on the 1-hour time frame on the XAU/USD chart for an early signal of a slightly bullish movement.
Prices slowed above the MA50 level for Asian and European session trading today, but investors were cautious heading into the New York session.
If the price continues to surge to a higher level, the price is seen to reach the 2000.00 zone again.
An important zone that functions as an SBR (support become resistance) is expected to exhibit an interesting reaction when the price touches the surrounding area and will give an indication of further movement.
However, if the price is pushed down again, the support zone at 1950.00 will be tested again this week after last week's decline failed to break through.
The price of gold will fall to a lower level if it falls past 1950.00 and the next target expects the price to reach 1900.00.
