Gold prices surged to a new 5-week high after surging past the crucial $2,700 mark.
In the New York session yesterday, US retail sales data released showed a dismal reading for December and pushed the US dollar lower.
This further paves the way for gold to continue its gains into the end of the week.
The price action on the XAU/USD chart, which measures gold’s value against the US dollar, remains bullish as the price moves above the 50 Moving Average (MA50) support level on the 1-hour timeframe.
After breaking above 2700.00 in the European session yesterday, the price continued to rise to a new high touching the 2720.00 zone.
This is a key resistance zone that was tested in November and December trading, but has yet to be broken.
After the price tested the zone, there was a price pullback towards the close of the New York session and the price slowly declined to continue trading in the Asian and European sessions today (Friday).
Further price declines are seen to be around 2700.00 again in addition to testing the MA50 support which will provide an indication for the next price movement.
If it falls further below 2700.00, the price is seen to be approaching the zone at 2670.00-2660.00 which was the focus at the beginning of last week.
However, if the price continues to rise, the resistance at 2720.00 needs to be broken to break a new record.
If successful, the latest 10-week high for gold prices will be recorded with the next target to go to 2770.00.
