On Monday, the metal hit the resistance of the 2,350.00 level and found support at 2,330.00, which previously acted as resistance. In the meantime, a new channel up pattern has been marked on the chart. However, note that the surge has been accelerating and breaking pattern after pattern. It could be the case that this one fails too. Economic Calendar Analysis
This week, US inflation data sets are in focus.
The United States Consumer Price Index will be released to the public on Wednesday at 12:30 GMT. The markets expect US inflation to show an average price increase of 0.3% in core and base levels. This would mean annual inflation of 3.4%, which is an increase, compared to March's 3.2%.
Higher inflation indicates that the Federal Reserve cannot cut interest rates and tightening of USD supply is needed. Namely, high inflation equals higher US Dollar value. Lower inflation is set to create the opposite – a decline of the USD.
On Thursday, at 12:30 GMT, additional US inflation data will be released. The less noteworthy Producer Price Index will be published.
The PPI shows price changes at the producer level. Base theory is that all price increases at the production level are sooner or later passed down to the consumer, as the producers want to stick to their profit margins. Namely, the PPI is a pre-signal to what will happen with the CPI.
XAU/USD short-term forecast
In regards to the near term future, watch the 2,330.00 support and resistance of the 2,350.00 level. If prior events repeat themselves, the metal is set to break the 2,350.00 and then confirm it as support.
Although, if the commodity price declines below 2,330.00, support would be looked for in the 2,300.00 mark, the 50 and 100-hour simple moving averages and the lower trend line of the channel up pattern.
XAU/USD daily charts review
On the daily candle chart, the metal has left the 50, 100 and 200-day simple moving averages far below the current price levels.Daily Candle Chart
Gold traders wait for decline
On Monday, 72% of Dukascopy traders were short, as that proportion of open position volume was in short positions.
In the meantime, pending orders in the 1000-pip range around the current price were 60% to buy the metal.
During Thursday's hours, some gold bears had given up, as 70% of volume was short. Pending orders were just 56% to sell.
Gold continues to go up, as Dukascopy traders wait for a decline that is not coming. However, the presence of close by buy orders indicates that the final stop loss level is close by.