Gold trading rattled investors on Tuesday as prices plunged deeper.
The attraction to gold assets is seen to be fading after the excellent price movement throughout last October.
After the price failed to break above the $2,000 level last week, a bearish pattern has been on display since the opening of trading earlier this week.
If you look at the XAU/USD chart that measures the value of gold against the US dollar, the price has managed to reach the 2000.00 level in a surge last Friday when the United States (US) NFP data was published.
But that level is seen now as an obstacle that holds the price from going higher.
The drop in prices was displayed at the opening of the beginning of the week until it continued on Tuesday yesterday.
The daily low hit yesterday was around 1957.00 before rebounding to close the New York session around 1969.00.
Price movement slowed down in the Asian session in Europe today (Wednesday), but remained below the Moving Average 50 (MA50) obstacle line on the 1-hour time frame on the XAU/USD chart, signaling that price movement is still in a bearish trend.
A further drop in price is expected to reach 1950.00 for the price to test the RBS (resistance become support) zone.
A lower breakout will be a warning to investors to prepare for a more severe fall in gold prices.
On the other hand, if the price recovers to make a rally again, breaking the MA50 barrier and the 1980.00 zone will be a positive indicator.
A rise in gold prices will retest important resistance at the 2000.00 zone before being able to continue its climb to a higher price peak after that.
