The fall of the yellow metal, which was long expected, occurred on Friday. Namely, the price dropped ten dollar by 14:00 GMT on Friday.
The fall though had ended, as the pair had encountered the lower trend line of a large scale ascending pattern.
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
The meeting summary stated, "With an increase in the target range at this meeting, the federal funds rate would be at or close to the lower end of the range of estimates of the longer-run neutral interest rate, and participants expressed that recent developments, including the volatility in financial markets and the increased concerns about global growth, made the appropriate extent and timing of future policy firming less clear than earlier."
Canada fed the macro traders
There will be no notable data releases left on Friday, as the Canadian CPI was released at 13:30 GMT and created a 30 pip move.XAU/USD short term forecast
During Friday's morning hours, the yellow metal was retraced by the 23.60% Fibonacci retracement level and the simple moving average to trade at the 1,288.11 mark.
In regards to the near-term future, most likely, the gold will continue depreciating against the US Dollar to the 1,284.00 level. Besides, the resistance levels of the simple moving averages and the 23.60% Fibo will prevent the rate from surge during the trading day.
Moreover, none of the technical indicators could support the yellow metal from the fall.
Hourly Chart
A large scale review of the yellow metal's daily chart has been conducted. Zoom out the chart to see more details.In general we have identified three patterns, which represent three various large scale trends. Two of the patterns are junior to the dominant one and have guided the commodity price into the upper trend line of the largest pattern.
The commodity price is set to test and make one attempt after another to pass the upper trend line of the just mentioned pattern near the 1,300.00 mark.
From a fundamental large scale perspective, if the US Federal Reserve slows down their restrictive monetary policy, then the US Dollar would lose value. In that case gold prices will surge above the 1,300 level.
It could occur through a sudden jump caused by a Federal Funds Rate announcement or a press conference hosted by the central bankers.
Daily Chart
Traders short the yellow metal
Traders continued to short the metal, as since Tuesday 60% of open gold positions on the Swiss Foreign Exchange were short.
That means they are all in the profit zone now.
In the meantime, trader pending orders in the 1000-base point range were 65% to buy. Previously, 53% were set to buy.
In general, traders have open short positions that are in the profit. However, the take profits and stop losses are close buy.
Moreover, there are more buy orders than short positions. It means that some have also set up orders that would open long positions in the case of a retracement upwards.