By the middle of Friday's London trading, the yellow metal had retreated down to the 1,630.00 level. At that mark, the 200-hour simple moving average was met. This event signaled that the metal is no longer overbought.
Meanwhile, it could be observed that the metal had remained near the same level throughout this week, despite making attempts to surge.
Economic Calendar Analysis
Next week, already on Monday, a data release could cause a notable move. The US ISM Manufacturing PMI is scheduled to be published at 15:00 GMT.
Some might consider watching the ADP Non-Farm Employment Change on Wednesday at 13:15 GMT.
On Wednesday, at 15:00 GMT the US ISM Non-Manufacturing PMI is set to be published.
On Friday, the US employment data will be released at 13:30 GMT.
This event consists of three data sets – the Unemployment Rate, Non-Farm Employment Change and the Average Hourly Earnings.
Meanwhile, next week's data is available. Click on the link below to see the historical data tables with the reactions to various events.
XAU/USD short-term forecast
The metal is expected to continue to trade sideways between the 1,630.00 and 1,640.00 levels. However, any fundamental news could cause a surge or a drop.
In the current market environment, since Thursday, the bullion has been ignoring technical levels. It is more important to watch round price levels for short term guidance, as the price makes stops or reverses at them.
Hourly Chart
On the daily candle chart, the pierced channel up pattern continues to hold. It can be deducted from the recent surge that the pattern could be adjusted to the high levels of January and February.
In the meantime, in accordance with the pattern the commodity price should fluctuate sideways until it reaches the lower trend line of the pattern. In addition, as the pair trades sideways, the 55-day simple moving average could catch up to it and provide additional technical support.
Daily Chart
Traders are short on gold
Since Wednesday, the Swiss Foreign Exchange gold sentiment was 64% short. Namely, 64% of open position volume was in short positions.
By the middle of Friday's trading, the sentiment decreased to 62% short.
Meanwhile, in the 1000 base point range around the current metal's price the pending orders were bullish – 77% of orders were to buy and 23% to sell.
Previously, the orders were 82% to buy and 18% to sell.