The price of gold experienced a sharp decline in trading on Tuesday yesterday as the US dollar showed its strength again.
As gold assets lose their appeal, the US dollar is in demand in a market sentiment that is reassessed as risky.
Analysts focused on concerns over the weak growth of economic activity in China and Europe supported by the latest published data.
The current market sentiment will continue to be monitored with the current advantage still favoring the US dollar which is expected to maintain its strengthening.
On the XAU/USD chart which measures the value of gold against the US dollar, the price which had reached the high level of 1950.00 last week started to display a different movement pattern this week.
The price decline was displayed yesterday with a bearish signal where the price remained moving below the Moving Average 50 (MA50) barrier level on the 1-hour time frame of the chart.
The decline to the 1926.00 level until the end of the New York session is seen to continue again in the European session today towards the important zone of 1920.00.
If the zone is also broken, this will be a critical indication that the price is more likely to fall lower.
The price could retrace to the 1900.00 level and the price reaction will be watched for an indication of the direction of further movement.
However, if the price of gold reverses to make an increase again, passing the 1930.00 zone will see the price try to break through the MA50 barrier.
If it happens, the price increase will go back to the resistance level reached last week which is the height of 1950.00.
