Although there was no price drop in gold trading heading into the end of the week, investors remained vigilant watching the current movement of the supported price at the $2,050 level.
After the recovery of the US dollar since last Wednesday when the economic growth data of the United States (US) recorded encouraging readings, the strengthening was seen to continue until Thursday yesterday.
But analysts see the situation as driven by profit-taking activities by market players at the close of trading in November yesterday.
Thus, the previous depreciation of the US dollar which started to subside is seen to have limited the continued increase in gold prices ahead of the opening of December.
On the XAU/USD chart which measures the value of gold against the US dollar, the price is seen moving horizontally below the 2050.00 zone for two consecutive days.
After the price spike reached a high of 2050.00 last Wednesday, the price began to slow below that resistance zone until yesterday.
An early warning of the fall of gold was observed by investors when the price movement started to fall below the Moving Average 50 (MA50) barrier line on the 1-hour time frame on the XAU/USD chart.
The decline in the New York session yesterday reached around 2031.00 but the price bounced back a bit before leveling off around 2040.00 into the European session this afternoon while testing the MA50 barrier.
If the price increase still manages to continue, the 2050.00 resistance will continue to be tested to be broken after several times of failure to do so.
Breaking through the resistance will push gold higher towards the next target at around 2070.00.
However, if the price of gold plummets, the levels that will be seen will be the focus on 2030.00 and then 2000.00.
Investors will observe the price reaction in the important zone before determining the direction of further price movement.
