A cautionary warning for gold investors as the market witnessed a significant price plunge for the yellow metal asset.
The plunging situation occurred after the latest record high price in history was successfully recorded at the height of $2,790.
Analysts saw profit-taking by market players for the October close yesterday and were wary of uncertainty ahead of the presidential election and next week's FOMC meeting.
The US dollar is also starting to show signs of strengthening again with early signs of ADP employment data showing a jump in gains in October.
Investors are looking forward to the United States (US) NFP jobs report in the New York session tonight.
Examining the XAU/USD price chart which measures the value of gold against the US dollar, there are early indications of a change in trend with the movements displayed yesterday.
The price that has recorded the highest record at 2790.00 started to change direction with a drastic plunge in the New York session yesterday, seeing the price back below the barrier line of the Moving Average 50 (MA50) on the 1-hour time frame on the chart.
The price plunged below the 2770.00 level to almost reach 2730.00 before starting to bounce slowly.
The slow movement continued into the Asian session this morning before capping around 2757.00.
With the pattern displayed yesterday, the price of gold is seen to continue to decline further to a lower level, surpassing last week's level.
The target on the nearest concentration zone is at 2670.00.
However, the direction of price movement may change with the reaction to the NFP data that will be published shortly.
If the price of gold surges and manages to cross 2770.00 again, there is still the potential for the latest record to be recorded again with the level of 2790.00 that was previously reached as price resistance.
See the XAU/USD price chart image below for your technical analysis reference.
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