In contrast to the positive pattern displayed last week, gold at the beginning of this week showed a fall in price again.
Changes in current market sentiment affected the movement of the US dollar currency which also drove gold trading yesterday.
Market focus is directed at the emergence of the Chinese AI application, DeepSeek, which has triggered a threat to applications and platforms in the United States (US).
DeepSeek not only affects the currency market, but stocks, commodities and crypto have also seen a significant impact.
Investors are observing price movements on the XAU/USD chart which measures the value of gold against the US dollar.
At the end of last week, the price reached a height of 2785.00 which is close to the all-time high recorded in October 2024.
At the opening of the Asian session yesterday, the price showed a drop from the level of 2770.00 to reach around 2750.00 before rebounding back to the level of 2770.00 in the European session.
The 2770.00 level became a new resistance, witnessing a more significant drop in the New York session to reach around 2730.00.
A bearish signal for gold when the price began to change direction and move below the Moving Average 50 (MA50) resistance line on the 1-hour time frame on the XAU/USD chart.
The price leveled off slowly at around 2740.00 in the Asian session this morning (Tuesday) with a slow decline seen in the early European session.
The continued decline is seen heading towards the level of around 2720.00 to test the RBS (resistance become support) zone.
A break lower would expect a more severe fall in gold with the target shifting to the previous focus zone of 2670.00.
However, if the price manages to bounce back, the 2770.00 level is an important resistance for the test price.
Passing that resistance, the MA50 barrier will again signal a change in the bullish trend for gold before hunting for the latest record high.
