On Monday, the yellow metal was retreating down to face support levels near the 1308.00 level.
Meanwhile, note that the recent decline is occurring as a consolidation of previous gains.
There are various minor data releases scheduled for this week, which are unlikely going to influence the financial markets. However, there is one event that is set to take all attention and cause a reaction.
The major event will be the Bank of England rate announcement on Thursday. The rate announcement and the results of the central bank's monetary policy vote will be published at 12:00 GMT.
Another notable event during this week will be the Canadian Employment data release on Friday at 13:30 GMT.
Both of these events are scheduled to be covered by Dukascopy Analytics on our Dukascopy Webinars YouTube channel. The streams start ten minutes before the data release.
XAU/USD short term forecast
During Friday's trading session, the yellow metal passed through the support level of the 55-hour simple moving average to the 1,314.00 mark. On Monday morning, the gold was depreciating against the US Dollar to pass through the support of the 100-hour simple moving average to 1,310.75.
Most likely, the yellow metal will bounce off the monthly pivot point at 1,308.46 to stay at the 1,312.00 level during the trading session.
However, the gold could pass through the support level of the monthly pivot point at 1,308.46 to trade near the 200-hour simple moving average at the 1,30.50 mark.
Hourly Chart
On the daily chart traders can observe the breaking of dominant patterns. The break was caused by fundamental changes in the US Dollar's value.Namely, last week the Federal Reserve announced that the US monetary policy will not be as tight as previously expected.
This revealed that the USD will be more available in the financial markets, and it caused a fall of its value. Due to that reason gold prices surged above the resistance levels.
Daily Chart
Traders go short
On Monday 73% of trader open positions were short. Traders were shorting the decline, which was occurring in the aftermath of the surge of the yellow metal.
In the meantime, trader pending orders in the 1000-base point range were bullish. Namely, 65% of trader set up orders on the Swiss Foreign Exchange were set to buy the metal.
In general, traders were shorting their decline. However, their stop losses and take profits most likely were close by, as most close by orders were set to buy.