The yellow metal on Friday was trading in accordance with technical tools. Namely, the 200-hour simple moving average had forced it into a surge, which had reached higher.
After a too extended surge the metal declined down to consolidate its gains. The retracement downwards stopped at the 23.60% Fibonacci retracement level at the 1,291.57 level.
In general, the surge was expected to continue when the 55 and 100-hour SMA approach it from the bottom and push it upwards.
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."
The week has ended
There are no data releases scheduled to occur on Monday. The description of the whole week's data releases will be available starting from Monday on all of the Trading Ideas publications.Meanwhile, join the weekly Economic Calendar analysis webinar on Monday at 12:00 GMT on our YouTube channel.
XAU/USD short term forecast
During the previous trading session, the gold passed through the support level of the 23.60% Fibo to depreciate to the 1,286.00 level. However, during Friday's morning hours, the yellow metal recovered itself to appreciate against the US Dollar to 1,293.29.
Most likely, the yellow metal will try to break through the resistance of the upper boundary of the descending pattern line at 1,297.00 to trade near the upper boundary of the dominant pattern line at 1,300.00.
On the other side, the gold might be depreciated against the US Dollar during today's US CPI and Core CPI data releases at 13:30 GMT to trade at 1,290.00.
Hourly Chart
The daily chart's patterns are broken. The metal has extended its gains far beyond expectations.In addition, note that the simple moving averages are now located far below the commodity price. Most likely a retracement downwards will occur in the near term future.
Daily Chart
Short sentiment increases
Since Monday, 58% of trader open gold positions were short. On Friday the short sentiment increased to 60%.
In the meantime, trader pending orders in the 1000-base point range were almost neutral, as 51% of orders were set to buy.