Gold is trading at a 5-week high after a strong price increase last week.
Although the US inflation data released strengthened the US dollar, gold prices managed to absorb the pressure.
The US retail sales data that followed with a weak reading opened the way for gold to continue to capture the $2,700 price zone.
A bullish pattern for gold is displayed on the XAU/USD chart that measures the value of gold against the US dollar, and is being watched by investors.
After the price managed to break through the 2700.00 level, the price reached a high of 2720.00 to retest the same resistance that was also tested in December last year.
However, towards the end of the week, the price began to retreat slightly in the final sessions below the 2700.00 level again.
The price movement remained hovering around that level when it resumed trading at the opening early this week.
The price increase is seen testing the Moving Average 50 (MA50) resistance line on the 1-hour time frame of the XAU/USD chart to provide an important clue.
If the price increase successfully continues to pass the MA50 barrier and then surpass last week's level, the bullish movement pattern of gold will continue.
The price will record a new 11-week high with the nearest target at a height of around 2750.00.
However, if the price plunges again, the 2670.00 zone will be approached again and will be tested.
Failing to bounce back, the price that breaks lower risks heading back up to 2600.00.
