The hearts of gold investors were beating fast yesterday when they saw the price of gold plummeting rapidly in just a few hours.
The fall in gold was driven by the strengthening factor of the US dollar following the reaction to the reading of the economic growth data of the United States (US) for the second quarter which increased.
This also supports the move to increase interest rates which may be continued by the Federal Reserve (Fed) after this.
After the FOMC meeting early yesterday morning, the price of gold still managed to survive and showed a pattern of increasing at a slow rate until the Asian session.
Examining the XAU/USD price chart which measures the value of gold against the US dollar, the price of gold plunged in the New York session from the level around 1980.00 to break through the important level of 1950.00.
Reaching around 1943.00, the price of gold rose again in the Asian session this morning to the level of 1957.00 before retreating back to around 1950.00.
The price movement that is still below the Moving Average 50 (MA50) barrier on the 1-hour time frame on the XAU/USD chart gives a bearish signal for gold.
The price may further decrease towards the RBS (resistance becomes support) zone of 1930.00 before tracking to the 1920.00 level.
However, price increases can also happen with the risk of market volatility towards the end of this week's trade close.
If the rally does happen, the MA50 barrier level will be tested before the price goes back to the highs before yesterday's plunge, at the 1980.00 zone.
Further movement patterns will be scrutinized next week as the market continues to digest the results of the central bank meeting as well as economic data that has been published.
