Gold started the August trade on a gloomy note as the price showed a further decline after closing the July session yesterday with a surge.
Investors remain cautiously anticipating price movements that remain volatile for the yellow metal as trading moves into the new month this week.
If observed on the XAU/USD chart which measures the value of gold against the US dollar, the price almost fell to the level of 1950.00 in the European session yesterday, but rebounded again when continuing trading in the New York session to reach the high level of 1972.00.
The price of gold then retreated again and continued at the opening trade of August today.
After showing a decline throughout the Asian session, the price has reached around 1954.00 as of 4pm local time while investors look forward to the opening of the New York session tonight.
The drop in price which has also moved below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the XAU/USD chart adds a bearish signal for the movement of gold.
The 1950.00 level is seen to be getting closer to being tested with the expectation that the price drop will continue further.
If it breaks through the 1950.00 level, the price will continue to decline past the lowest level last week around 1943.00.
Next, the 1930.00 zone will be the target price for the next drop before the target is directed to around 1920.00.
On the other hand, for the expectation of an upward movement for gold, the price that bounced back past the MA50 barrier will retest the high level reached yesterday.
If it is exceeded, the price increase will continue towards the resistance zone of last week around 1980.00 which will give an important reaction to the indication of further gold price movements.
