Gold ended the sideways trading in a twenty dollar range just after mid-day on Monday. The commodity price passed the support of the 1,722.20/1,725.30 zone. It resulted in a sharp move down, which was followed by narrow sideways trading.
On Tuesday, the decline resumed, as by the middle of the day, the price had reached below the 1,690.00 level.
On Wednesday, at 13:15 GMT, the US ADP Non-Farm Employment Change is set to be released.
On the same day, at 15:00 GMT the US ISM Manufacturing PMI is set to be scheduled.
The week will end on Friday with the top event, as the US Employment data is set to be released at 13:30 GMT. The event will consist of three data sets being released.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
XAU/USD short-term forecast
In the near term future, the yellow metal was expected to continue to decline until it reaches the support of the March low levels near the 1,680.00 mark.
If the zone of the low levels, provides support, the metal could trade sideways above it and consolidate the drop.
On the other hand, a failure of the low levels to provide support could result in the metal reaching the 1,650.00 level.
Hourly Chart
On the daily candle chart, the channel up pattern did not manage to provide support, as the price passed the lower trend line.
Meanwhile, at mid-day on Tuesday, support was being provided by the 61.80% Fibonacci retracement level of the 2020 high and low levels.
In addition, the support zone of the March low levels is not made up of the recent lows. Research the 2020 March high levels and the 2020 April to June low levels. The zone, which is being tested currently, was providing both resistance and support during last year.
Daily Candle Chart
Traders remain long
Since Monday, the sentiment on the Swiss Foreign Exchange was bullish, as 68% of open position volume was long.
Note that the gold sentiment is largely bullish at all times due to long term holders.
Meanwhile, in the 1000-pip range around the metal's price the pending orders were 85% to buy the metal.