On Tuesday, the yellow metal's price bounced off the support zone of the 1,720.00/1,725.00 levels. As soon as the price managed to pass the short term resistance of the 200-hour simple moving average, the price sharply surged.
Economic Calendar Analysis
On Tuesday, the US Consumer Price Index and Core Consumer Price Index could cause moves on all USD assets and pairs.
On Thursday, the US Retail Sales and Core Retail Sales are also bound to influence the value of the US Dollar.
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
The surge was expected to possibly stop at the 1,745.00 level, which had previously provided both resistance and support.
If the price passes the 1,745.00 level and the zone above it, the price could test the resistance of the April and March high levels. On the other hand, the price could remain below the 1,745.00 level or even return to the support of the 1,720.00/1,725.00 zone.
Hourly Chart
On the daily chart, the support zone of the March low levels is not made up only of the recent lows. Research the 2020 March high levels and the 2020 April to June low levels. The zone was providing both resistance and support during last year.
Most recently, the price passed the resistance line, which kept the metal declining throughout 2021. Namely, the described support zone provided enough support for the metal to break the resistance line.
The surge of the metal should test the 50.00% Fibonacci retracement level of the 2020 low and high levels at 1,763.74. In addition, the Fibo was being approached by the 55-day simple moving average.
Daily Candle Chart
Traders are long
Since Friday, the sentiment on the Swiss Foreign Exchange was bullish, as 65% of open position volume was long.
On Tuesday, the sentiment changed to 66% long.
Note that the gold sentiment is largely bullish at all times due to long term holders. It is quite rare for it to be below 70%.
Meanwhile, in the 1000-pip range around the metal's price the pending orders were 58% to buy the metal.