Gold trading will be influenced by the publication of important economic data this week with the most awaited focal event being the FOMC meeting.
With the expectation that interest rate hikes will be implemented by the Federal Reserve (Fed), the US dollar has the potential to strengthen ahead of the meeting.
This situation was already shown at the end of last week when the US dollar, which had experienced a decline before, showed a recovery again.
This also affects the movement of gold as shown on the XAU/USD price chart which measures the value of gold against the US dollar.
Last Thursday, the level of 1987.00 reached became the highest level for a period of 9 weeks before the price started to go down until the end of the week.
Moving below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the XAU/USD chart, the price of gold has touched around 1957.00 in the closing trade of the last session of the week.
Continuing the opening trade earlier this week, the price is hovering slowly above the 1957.00 level but is still below the MA50 barrier.
With the expectation that the US dollar will continue to strengthen, the price of gold will drop lower towards the previous concentration zone at 1950.00.
A lower drop that penetrates the zone will also test the RBS (resistance become support) zone at 1934.00.
However, if the price of gold rises again at the beginning of this week, pay attention to the level of the MA50 barrier that is passed, which will be an indication for a bullish movement again for gold.
The highs reached last week are likely to be re-targeted before the price continues its climb higher towards the 2000.00 focus level.
