The bearish scenario of the metal's price has become reality, as the bullion has declined to the 200-hour simple moving average near 1,685.00.
In regards to the future, the price is expected to consolidate, as it would get squeezed in between the 200-hour SMA and the resistance of the 55 and 100-hour SMAs.
On Thursday, at 12:30 GMT, the US Unemployment Claims are scheduled to be released. Most likely, the event would reveal another major decline in US employment.
Also on Thursday, at 13:45 US Manufacturing PMI could cause a move, as in February and March it created large moves.
Last but not least, a notable reaction could be created by the US Durable Goods orders on Friday at 12:30 GMT.
XAU/USD short-term forecast
On Thursday, the XAU/USD exchange rate failed to exceed the 1,740.00 level. During today's morning, the rate was trading at 1,690.00.
Note that yellow metal is squeezed by 55-, 100– and 200-hour moving averages, located near 1,716.00 and 1,684.00 respectively. Thus, the rate could consolidate in the nearest future.
However, if the 200-hour SMA does not hold, it is likely that the price for gold could continue to go downwards. In this case the rate could target the psychological level at 1,660.00.
Hourly Chart
The daily candle chart has been replaced with the weekly candle chart. On the chart the high levels of 2012 and 2011 have been added. These levels could provide resistance.
In the meantime, take into account that the surge started in the middle of March, when the metal's price found support in the 1,450.00 level and the 55-week simple moving average.
Weekly Chart
Short sentiment surges
Since the middle of Wednesday's trading, the Swiss Foreign Exchange sentiment was 53% short. Namely, 53% of open gold position volume was in short positions.
On Friday, the sentiment changed, as 56% of open position volume was short.