Gold prices retreated slightly in Wednesday's trading yesterday, not continuing the surge that occurred the previous day when the reaction to the United States (US) inflation data was published.
In the New York session yesterday, US producer price index data was published along with retail sales data that showed less encouraging readings.
The US dollar, however, did not show a further decline, instead moving slightly to recover from the biggest fall in the previous 1 year.
This has had the effect of lowering the price of gold in the New York session yesterday, halving the previous gains.
On the XAU/USD chart which measures the value of gold against the US dollar, the price initially continued to rise until yesterday's European session to around 1975.00.
But then the price plunged again to reach around 1955.00 before the price leveled off and slowed until the end of the New York session.
The price drop was also seen to test the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the XAU/USD chart, but still failed to break through.
On the other hand, the price that followed the MA50 line bounced back up in the Asian session this morning (Thursday) and continued to the European session, the price was around 1967.00.
The price increase is expected to continue, but the price needs to break the high level reached yesterday before testing the 1980.00 zone.
Next, the increase will continue to reach the 2000.00 level target which was the important focus of the price before.
However, if the price is pressed to fall lower, the 1950.00 zone is seen as a price focus to be tested.
If it breaks lower, this will be a warning for a further fall in gold which could reach back to around 1920.00.
