The metal has continued to trade between the simple moving averages of the hourly chart. By the middle of Tuesday's trading, gold was signalling that a decline might occur soon.
Namely, the metal pierced the support of the 200-hour SMA, which revealed that it lacks the strength to keep it from declining. Moreover, the 55-hour SMA was pushing the price through the longer term SMA.
As it is accustomed, the last week of the month is set to be quiet for fundamental macroeconomic data releases.
The macro week will start on Wednesday. At 13:30 GMT the Canadian CPI data will be published.
On Thursday the US Advance GDP will be released at 13:30 GMT. This event can cause moves of around 20 base points.
On Friday, the Canadian GDP data will be out at 13:30 GMT. It is most likely set to be the event which will cause the biggest move during this week.
For more information watch the weekly calendar analysis stream on our YouTube channel.
XAU/USD short term forecast
On Tuesday, the yellow metal pierced the support of the 200-hour SMA. With that the commodity price was signalling that it will decline.
Gold has no technical support as low as the 1,315.00 mark. The metal might reach this level by the end of this week.
However, take into account that round numbers on the gold price charts have shown resistance and support to the commodity.
Hourly Chart
On the daily chart the rate reveals that the monthly R1 of the simple pivot points provided the resistance for the decline.Meanwhile, note that the closest support on the daily chart was the 1,310.00 level. Close by was located a monthly PP and the lower trend line of the ascending pattern.
Daily Chart
Traders ride the downwards move
Traders have been largely shorting the metal throughout last week. This week, the situation had not changed.
By the middle of Tuesday's trading 65% of the total open position volume on the Swiss Foreign Exchange was short.
Meanwhile, the trader set up pending orders in a 1000 base point range around the metal's current price reveal additional information.
Namely, trader pending orders were mostly set to buy the commodity, as 61% of orders were set to buy.
The buy orders might be the take profits and stop losses of the short positions.