On Wednesday, gold traded near the 1,485.00 level, to where it had sharply plummeted on Tuesday. The decline of the metal had been stopped by the lower trend line of an ascending channel pattern, which can be seen on the hourly candle chart.
In regards to the near term future, the metal should consolidate by trading sideways.
US ISM Non-Manufacturing PMI
The Institute for Supply Management (ISM) released the US ISM Non-Manufacturing PMI survey results, which came out better-than-expected of 54.7 compared with the forecast of 53.5.
Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee commented: "According to the NMI, 13 non-manufacturing industries reported growth. The non-manufacturing sector had an uptick in growth after reflecting a pullback in September. The respondents continue to be concerned about tariffs, labor resources and the geopolitical climate."
Economic Calendar Analysis
There are no more events scheduled for this week, which could impact gold prices through the value of the US Dollar.
Meanwhile, take into account that the week's reaction tables have been published. Take a look at the 04.11-08.11 Event Historical Reactions publication.
XAU/USD short-term forecast
On Tuesday, the XAU/USD exchange rate tumbled to the lower boundary of the medium-term ascending channel at 1,482.00. During today's morning, the rate was trading near the given boundary.
From a theoretical perspective, it is likely that some upside potential could prevail in the market in the short run. However, it is unlikely that the price for gold could exceed the 1,497.51/1,504.12 area due to the resistance formed by the 55-, 100- and 200-hour SMAs, as well the monthly PP.
On the other hand, the exchange rate could trade sideways within the 1,485.00/1,490.00 area in the short term. If the given channel does not hold, the price for yellow metal could surpass the psychological level at 1,480.00.
Hourly Chart
On the daily candle chart, the commodity price passed the support of the 55-day simple moving average, which has been left behind near 1,505.00.
Meanwhile, the price is being approached by the support of the 100-day simple moving average, which on Wednesday was located at the 1,475.06 level.
Daily Chart
Traders go neutral on Gold
Since Friday, 55% of open gold position volume on the Swiss Foreign Exchange was in short positions.
The sentiment had changed by the middle of Wednesday's London trading, as 50% of volume was in short and long positions. Namely, the traders that were previously short had taken profit from the sharp decline.
Meanwhile, in the 1000 base point range around the current metal's price the pending orders were bullish– 61% of orders were to buy and 39% to sell.
Previously, the orders were 57 % bullish.