Early on Tuesday, the yellow metal's price reached the 1,485.00 level, as SWFX traders closed short positions.
In regards to the near term future, the metal should consolidate above the 1,485.00 level until the oversold pressure is removed or new fundamental news are revealed.
Economic Calendar Analysis
This week gold is bound to be affected by US data and an expected rate cut.
On Wednesday, October 30, the US ADP Non-Farm Employment Change data will be published at 12:30 GMT.
On the same day, the US Advance GDP will be published at 12:30 GMT. This is the top US GDP data release.
Moreover, the FOMC Statement and the Federal Funds Rate are scheduled to be published at 18:00 GMT.
On Friday, November 1, the US Employment data set will be on focus - the Average Hourly Earnings, the Non-Farm Employment Change and the Unemployment Rate data will be published at 12:30 GMT.
Also on Friday, the ISM Manufacturing PMI survey results will be published at 14:00 GMT.
For more detailed information take a look at the 28.10-01.11 Event Historical Reactions publication.
XAU/USD short-term forecast
By the middle of Tuesday's trading, the metal fluctuated with high volatility between the 1,485.00 and 1,490.00 levels.
In general, the rate was expected to fluctuate sideways, as the metal has left above it the hourly simple moving averages, which indicates that the pair is oversold.
However, take into account that any fundamental announcement about trade wars or the expected US rate cut could cause a sharp move either up or down.
Hourly Chart
On the daily candle chart, the commodity price has pierced the lower trend line of the large scale ascending channel pattern. The pattern represents the metal's surge, which has occurred since the start of summer.
It might be the first signal that the surging of the metal is clearly over. Although, the metal has not been reaching new high levels since the start of September.
Daily Chart
Traders close short positions
Since Wednesday, 73% of open gold position volume on the Swiss Foreign Exchange was in short positions.
The sentiment changed on Monday, as 58% of volume was in short positions.
By the middle of Tuesday's trading, only 53% of open position volume was in short positions. Traders had taken profit from the recent decline.
Meanwhile, in the 1000 base point range around the current metal's price the pending orders were mostly bullish – 71% of orders were to buy and 29% to sell.
On Monday, 76% of orders were to buy.