It is no coincidence that the price of gold soared within one day on Friday trading, last week. What happened?
Looking at the price movement on the XAU/USD chart which measures the value of gold against the US dollar, surprises were presented last week from the opening to the close.
Earlier in the week, prices had opened higher due to the ongoing Middle East conflict.
However, the price 'gap' still failed to close until the end of the week when prices continued to rise to the top.
Although the US dollar strengthened at the end of the week, it did not manage to put pressure on gold as usual, instead the attraction to the safe-haven asset pushed the price to reach a 3-week high.
On Thursday, the price showed a decline from the 1885.00 level to around the 1870.00 zone when the market reacted to the United States (US) inflation data that had been published.
However, on Friday, the price of gold did not continue to fall lower, instead it reversed its direction to increase again and the surge continued until the last session of the week.
From around 1870.00, the price of gold surged through the 1900.00 level until the latest high was reached at 1930.00.
Following the opening of the trade earlier this week, a bearish pattern was exhibited again towards the level around 1908.00 as of the European session.
However, the trend remains bullish where the price is still above the Moving Average 50 (MA50) support line on the 1-hour time frame on the XAU/USD chart.
If the bullish movement of last week is maintained again, the price can rise again above the 1920.00 level before recording the latest high level again this week.
The higher target for gold is reaching the 1950.00 level after the price last tested that level in early September.
Meanwhile, expectations for a decline are seen to react at around the 1900.00 level with the continued decline testing the 1885.00 level.
A drop below the MA50 support will be a warning sign to investors for a further fall in gold prices afterwards.
