The decline of the yellow metal passed the support of the 1,600.00 level and reached the 1,560.00 mark.
In general, the forecast of a decline had become reality.
Next week, on Tuesday, the US Retail Sales could cause a small move in the markets at 14:30 GMT.
On Wednesday, the event of the week is set to occur, as at 20:00 GMT the FOMC Statement and Federal Funds Rate are going to be published.
Meanwhile, Dukascopy Analytics are not publishing the historical reactions this week, as the market environment has changed to such a degree that the historical data is unlikely to be relevant.
XAU/USD short-term forecast
On Thursday, the XAU/USD exchange rate dropped to the 1,560.00 level. During today's morning, the rate was trading in the 1,580.00 area.
On the one hand, it is likely that yellow metal could depreciate against the US Dollar in the nearest future. In this case the price for gold could decline below 1,560.00.
On the other hand, it is likely that some upside potential could prevail in the market. Note that the rate would have to surpass the monthly PP at 1,607.96. Also, it is unlikely that the price for gold could exceed 1,640.00 due to the resistance formed by the 100– and 200-hour SMAs.
Hourly Chart
On the daily candle chart, the previously described combination of three support levels near 1,600.00 did not hold. The commodity price dropped and passed the support of the 55-day simple moving average.
In addition, the metal approached the lower trend line of a larger scale channel up pattern near 1,550.00.
In regards to the future, the 55-day SMA could provide support, as the price attempts to pass the resistance of the levels located near 1,600.00.
Daily Chart
Traders become neutral.
Since Tuesday, the Swiss Foreign Exchange gold sentiment was 65% short. Namely, 65% of open position volume was in short positions.
On Thursday, the sentiment changed to being 62% short. It was assumed that some traders took profits during the drop of the price.
On Friday, the rest of traders had taken profits, as the sentiment was 51% long. Traders had become neutral.