It was quite a surprise for gold investors on Wednesday yesterday when they saw the price of the yellow metal experience a significant drop.
The continued strengthening of the US dollar is seen to put pressure on gold trading, but investors do not expect the fall in prices to erase the gains made the previous day.
However, the price of gold is still hovering in its highest zone while recovery is also shown in the Asian session and the beginning of the European session today.
Observing the price movement on the XAU/USD chart yesterday, the price managed to break the latest record high reaching 2758.00.
Later, the price plunged significantly to reach around 2710.00 in trade towards the end of the New York session.
This is also an early warning to investors for a possible change in the gold price trend after starting to move below the Moving Average 50 (MA50) obstacle line on the 1-hour time frame on the chart.
The price increase until the beginning of the European session today is seen to test the MA50 barrier which will signal for further price movement.
If it manages to break through to the top, the rising pattern is likely to continue to reach yesterday's high.
If gold continues to gain traction, the price could set a new all-time high yesterday with the closest target seen at 2770.00.
However, if the price does not continue to rise, a lower price drop may occur for the price to continue the plunge pattern displayed yesterday.
Exceeding yesterday's level would expect the price to drop further down towards the 2670.00 concentration zone.
