Compared to the dismal performance throughout last week, gold trading showed a more positive price movement pattern at the opening of the early week yesterday.
The mixed-traded US dollar currency has opened up space for gold prices to show an increase and break out of the previous flat zone.
Despite the increase shown, investors remain wary of any unexpected situations that may occur on gold as important data is expected to be published this week, especially United States (US) inflation.
On the XAU/USD chart that measures the value of gold against the US dollar, the price is seen to have managed to make an increase yesterday, surpassing the 2650.00 level which is seen as a resistance level for last week’s price.
The increase until the beginning of the New York session reached a high of 2676.00, but the price retreated back down before slowing down around 2660.00.
Despite showing a bullish signal with movement above the Moving Average 50 (MA50) support line on the 1-hour chart, the price is still seen hovering slowly below the 2670.00 zone in Asian and European trading sessions today (Tuesday).
If the price manages to show a strong surge above the 2670.00 zone, investors will be more confident in expecting bullish movement in gold this week.
The target for the price increase is to re-reach the height of 2720.00 recorded in the last week of trading last November.
However, if this does not happen, and the gold price plunges again in the following trading sessions, it is likely that the price will approach the 2600.00 focus zone.
If the zone fails to become a support for the price, the risk of a lower fall for gold could reach around 2540.00.
