As the US dollar strengthened after the US NFP employment report was published last Friday, gold trading successfully showed its value surge.
In the New York session, which was the last trading session last week, full attention was focused on the NFP employment report for December which will provide an insight into the direction of the central bank's monetary policy.
The increase in employment surged above forecasts while the unemployment rate decreased from the previous month.
Thus, the US dollar significantly strengthened, sinking other major currencies in the market.
Gold also received initial pressure when the US dollar strengthened, but managed to recover to rise strongly towards the end of the session.
If you look at the XAU/USD chart which measures the value of gold against the US dollar, the price hovering around 2680.00 was briefly pushed down to around 2664.00.
Then the price continued to rebound again until reaching the latest 4-week high of around 2698.00.
The price closed slightly below that height and continued the opening trade earlier this week, the price leveled off below 2690.00.
The price movement still remains in a bullish trend that is above the Moving Average 50 (MA50) support line on the 1-hour time frame on the chart.
If the upward pattern of gold prices continues, the price will surpass last week's level before reaching a new record high.
The target is to head towards 2720.00 which is a resistance level that was tested several times in early December trading and also at the end of November.
Meanwhile, if the price makes a decline downwards, the zone around 2670.00 will be a support for the price.
Breaking below the MA50 line will give a bearish signal for the gold price with the focus back on 2600.00 previously.
