On Monday, the price for the yellow metal plummeted more than 100 USD per ounce or 5.53%.
The surge was caused by news from a public company. Pfizer announced that its Covid-19 vaccine was effective in more than 90% of cases in a large scale study.
This event caused a risk on sentiment. Safe haven assets like the Japanese Yen and Gold plummeted in price. Meanwhile, stock indices reached new record high levels, as a revival of the economy was expected.
On Thursday, at 13:30 GMT USD pairs could move because of the release of the US Consumer Price Index and the Unemployment Claims.
On Friday, the US Producer Price Indices are scheduled to be released at 13:30 GMT.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
XAU/USD short-term forecast
In the aftermath of the fundamental drop, the yellow metal's price was recovering. On Tuesday morning, the recovery was stopped by the monthly S2 pivot point at the 1,890.23 level.
By the middle of the day's European trading hours, the price was heading back to the previous low level near the 1,850.00 mark. A decline could be stopped by the monthly S3 simple pivot point at 1,862.95 or the psychological effect of the 1,850.00 level.
In the case of the mentioned support levels failing, the rate would have no technical resistance at all. Only round price levels could slow down the decline.
Hourly Chart
On the daily candle chart, the yellow metal has passed the support of the 55 and 100-day SMAs and the Fibonacci retracement levels, which impacted the price since August.
In the meantime, note that the 1,850.00 level provided the metal with support in late September. However, at that time a reversal could have occurred due to the additional support of the 100-day SMA, which strengthened the 1,850.00 mark.
Daily Candle Chart
Traders remain long on Gold
On Tuesday, on the Swiss Foreign Exchange the sentiment was bullish, as of total open position volume 58% was long.
On Monday, 55% of volume was in long positions. Traders remained long despite the drop.
Meanwhile, in the 1000-pip range around the metal's price the pending orders were 70% to buy the metal.