The strengthening of the US dollar, which was still maintained at the beginning of the week, was a factor that depressed the price of gold, falling slightly lower in the New York session yesterday.
The United States (US) manufacturing and services PMI data published better than Europe for July, supporting the strengthening of the US dollar ahead of the FOMC meeting.
However, the situation changed in the trading session of Asia this morning (Tuesday) following developments from China with reports that the government will implement stimulus measures to support the recovery of the country's economy.
This has again restored pressure on gold by showing a surge in value again while the US dollar began to shrink.
This situation can be observed on the XAU/USD price chart which measures the value of gold against the US dollar when yesterday's price drop has reached around 1954.00.
A surge happened in the Asian session just now to the level of 1963.00 with the barrier level of the Moving Average 50 (MA50) on the 1-hour time frame on the chart with an indication of a trend change observed by investors.
If the price returns to show a decline again, the 1950.00 level is seen as a target to be targeted and tested like last week.
However, if the penetration is lower, the price will continue the bearish trend with expectations towards the RBS (resistance becomes support) zone at 1930.00 before the 1920.00 level becomes the next focus.
However, if the surge just now continues in the following sessions, the high level reached last week around 1987.00 will be challenged again.
Recent highs are likely to be recorded if the bullish momentum is maintained and the higher target for gold will shift to the 2000.00 level.
