Not having time to recover further, gold trading continued to fall again on Wednesday trading yesterday when the price dropped to the lowest level in 3 weeks.
The situation has been driven by the strengthening factor of the US dollar supported by the ADP employment data report of the United States (US) for the month of July published in the New York session yesterday.
The private sector job growth figure increased by 324,000 compared to the forecast of only 191,000 for July and this gives positive expectations for the NFP report on Friday.
Positive published data further supports the Federal Reserve's (Fed) monetary policy towards tightening, keeping the US dollar strong and putting pressure on gold.
On the XAU/USD chart which measures the value of gold against the US dollar, the price is seen to have failed to hold above the 1950.00 level and a drop to lower levels has occurred yesterday.
The slow rise in yesterday's European session failed to cross the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the XAU/USD chart, which is an indication to investors for gold to maintain its downward pattern for the time being.
The latest drop in the New York session yesterday reached 1933.00 and the price movement is seen to be flat around that continuing trading in the Asian and European sessions today.
With the displayed pattern, the price drop is expected to continue further to reach the next concentration level at 1920.00.
If that level is also successfully penetrated, the price can reach around 1900.00 which is a critical zone for gold.
On the other hand, if the price of gold manages to recover towards the end of this week, the increase will retest the level of 1950.00 which will be the closest price resistance.
A move higher that also crosses the MA50 barrier will signal an early change to a bullish trend.
Prices could head back to the highs reached earlier in the week around 1972.00 if the rally continues higher.
