The recovery in gold prices looked bleak at the end of last week after investors saw a sharp drop earlier in the week to around $2,300.
As the turmoil in the Middle East begins to subside, the focus is directed to the US dollar situation that affects the current movement of gold.
The performance of the US dollar last week was weak following the economic data of the United States (US) presented with less encouraging readings including the slow economic growth of the first quarter of 2024.
With market speculation mixed, this week's focus will be entirely on the FOMC meeting for a clearer indication of the direction of further Federal Reserve (Fed) monetary policy.
Examining the price movement on the XAU/USD chart which measures the value of gold against the US dollar, the price slightly recovered from the fall to the 2300.00 level and managed to reach the 2350.00 level on Friday.
Gold prices started trading around the 2335.0 level at the opening of the Asian session this morning before falling to around 2320.00.
A move back below the Moving Average 50 (MA50) barrier line on the 1-hour time frame on the XAU/USD chart signals a bearish move for gold.
It is likely that the price will drop back to around 2300.00 like last week to once again test the support zone.
If it breaks down, the decline is expected to extend to the next concentration zone around 2270.00.
Meanwhile, for the expectation of an increase in the price of gold if it happens, the target is to reach the previous highest record at 2430.00.
Levels 2360.00 and 2400.00 are among several concentrations that need to be passed before reaching the peak.
