Gold investors breathed a momentary sigh of relief as the price of the yellow metal bounced back at the end of last week instead of plunging deeper.
Last Thursday, the price of gold showed a drastic plunge to below the $1,950 level due to the strengthening factor of the US dollar.
The situation has been driven by the release of data on economic growth in the United States (US) for the second quarter which was encouraging, as well as supporting expectations for the tightening of monetary policy by the Federal Reserve (Fed).
However, the momentum that was not successfully maintained at the end of the week has reduced some pressure, making the price of gold bounce back.
On the XAU/USD price chart, which measures the value of gold against the US dollar, the price rebounded to 1963.00 last Friday.
Continuing the opening trade earlier this week, the price is seen displaying a slow bearish pattern that is blocked by the Moving Average 50 (MA50) level on the 1-hour time frame on the XAU/USD chart.
The initial price drop is seen to test the 1950.00 level and if it breaks lower, it will also test the lowest level reached last week around 1943.00.
The strengthening of the US dollar if it continues this week can push the price of gold deeper to the 1930.00 zone and if lower, the 1920.00 level will be the next focus.
However, if there is a jump in the price of gold at the beginning of this week, the price increase will return to the resistance zone last week at the height of 1980.00.
Once successfully overcome, the price will continue to rise higher with the target being directed at the 2000.00 level to record the latest 12-week high level.
