Gold reacted to the news with a breaking of the resistance of the 1,920.30/1,922.60 range and the 50-hour simple moving average and hitting the combination of the 100-hour SMA and the 1,930.00/1,932.25 range. The resistance held and combined with the fundamental reversal of the US Dollar caused a decline.
By midnight to Friday the pair had almost reached the support of the 1,910.25 level, before starting a recovery. By mid-Friday the commodity had recovered and was testing the resistance of the 1,920.30/1,922.60 range and the 50-hour SMA. Economic Calendar Analysis
On August 11, the markets will look at the US Producer Price Index at 12:30 GMT to analyse potential consumer price increases in the future.
Producers usually increase their prices in accordance with their own expense increases. Namely, they quite often investigate the consumer tolerance of price hikes by continuous increases until they spot a drop in volume. In the current environment some firms have reached this point.
XAU/USD short-term forecast
A bounce off of the resistance range could look for support in the 1,910.25 level. Further below, support is set to be found in the lower trend line of the channel down pattern and the 1,902.50/1,905.00 range.
However, a breaking above 1,922.60 is set to face the resistance of the 100-hour SMA and 1,925.00 level. Higher above, the 1,930.00/1,932.25 range could stop another attempted recovery, as it has done already three times.
XAU/USD daily charts review
On the daily candle chart, the metal has passed below the 200-day simple moving average on Wednesday. Support was found on the same day in the 1,900.00/1,915.00 range. On Thursday, the 200-day SMA was confirmed as resistance.Since the events described above, the metal appears to be squeezed in. The approaching 50 and 100-day simple moving averages could provide additional resistance and create a move through the 1,900.00/1,920.00 range.
Daily Candle Chart
Gold traders are mostly long
On the Swiss Foreign Exchange, traders are 67% bullish on gold, as that proportion of open Gold positions are long.
In the meantime, pending orders in the 1000 point range around the current price are 56% to sell.