Examining the XAU/USD price chart which measures the value of gold against the US dollar, the price so far last week has fallen to the level of 1885.00 which is the lowest level for a period of 5 months.
The continued strengthening of the US dollar continues to pressure gold prices falling 4 weeks in a row after rising in last July to a high of 1987.00.
Risk market sentiment supported the US dollar as a safe-haven currency to remain firm, while gold also lost traction.
After last week the market saw the gold price fall below the level of 1900.00, the bearish pattern continued again until the price broke above the level of 1885.00.
Prices flattened last Friday, but remained below the 50 Moving Average (MA50) resistance level on the 1 hour time frame on the XAU/USD chart for a continued bearish signal.
Once again the price tested the support level of 1885.00 during the Asian session this morning and it seems that the price has bounced back to the level of 1893.00.
The MA50 barrier remains difficult to penetrate, the price has retreated back down towards the level of 1885.00 in the European session.
Investors are waiting for the decline to continue this week breaking the 1885.00 support before posting new lows.
The next target is to see the price drop to the level of 1870.00 before dropping even lower to 1855.00.
That is, if the price maintains the previous pattern of movement, but be careful if the price direction starts to change up too.
The bulls that broke through the MA50 barrier will return towards the 1900.00 level to test the barrier.
The advance higher will be towards the prior support zone which is at 1920.00.
