Gold trading fell again on Thursday after its previous excellent performance showing a positive price increase since the beginning of the week.
The situation changed when the US dollar was seen gaining support heading into the last FOMC meeting of 2024 next week.
US producer inflation data published in the New York session yesterday recorded an increase exceeding expectations, in line with the consumer inflation reading published last Wednesday.
The strengthening US dollar has put renewed pressure on gold, which has again reduced by half the gains achieved from the beginning of the week.
If you look at the XAU/USD chart that measures the value of gold against the US dollar, the price has managed to rise above the 2700.00 level and retest the high of 2720.00 as achieved in trading on November 25.
In the Asian session yesterday, Thursday, the price managed to rise slightly to the 2726.00 level before the downward price pattern began.
Until the New York session resumed, the price had plunged to 2675.00 before the price movement was flat around that zone in the Asian session this morning.
The price is now moving below the Moving Average 50 (MA50) resistance line on the 1-hour chart, giving a bearish signal for the price.
The 2670.00 level is seen as support that the price will test and if the price fails to bounce back up, it will be a warning for a more severe fall in gold.
The extended decline can be expected to reach around 2600.00 for the price to react and give important clues to investors.
However, if the price manages to bounce back in trading in the last sessions of this week, the 2720.00 level is important to reach again before the bullish signal is identified.
