Gold prices soared higher in the New York session yesterday, making investors smile again after weeks of continuous decline.
The situation that occurred was caused by the significant depreciation of the US dollar currency yesterday following the reaction to the published data.
The United States (US) manufacturing and services PMI reading posted a declining reading for August, following similar readings in Europe.
The weakening of the US dollar has given room again to the price of gold to jump higher this week.
Through the XAU/USD price chart which measures the value of gold against the US dollar, the price is seen to have successfully climbed higher after passing the 1900.00 level.
A significant increase in price was exhibited in the New York session until the price reached the height of 1920.00 again.
Investors have been prepared since the beginning of the week for this change in price direction following the price movement that has started to be above the Moving Average 50 (MA50) support level on the 1-hour time frame on the XAU/USD chart.
Slightly retreating at the close of the New York session, the price of gold hovered again at the 1920.00 level in trades connected to the Asian and European sessions today (Thursday).
It is likely that the price increase will continue in the next session with the 1930.00 zone being the next focus.
If the bullish pattern is successfully maintained, the price can reach back to the 1950.00 high level that was also in focus before.
However, it is not impossible that the price of gold can fall again from the current level of 1920.00.
The decline is seen to return towards the 1900.00 zone while testing the MA50 support level.
Falling lower will see the 1885.00 support that successfully prevented the previous price drop, will be tested again.
