Since the bounce off from the 1,765.00 level on Monday, the yellow metal has been trading between 1,730.00 and 1,740.00.
However, on Tuesday the situation could change, as the rate was approached by the support of the 100-hour simple moving average.
This week, Markit is going to publish the US Flash Manufacturing PMI survey results on Thursday, May 21, at 13:45 GMT. It could affect gold prices through the strength of the US Dollar.
XAU/USD short-term forecast
On Monday, the XAU/USD exchange rate revealed a rising wedge pattern, as it reversed south from the upper pattern line. During today's morning, the pair was testing the support formed by the 100-hour SMA near 1,730.00.
If the given support holds, it is likely that a reversal north could occur, and the price for gold could target the upper pattern line, as well the monthly R1 at 1,767.34.
Meanwhile, note that yellow metal could be pressured by the 55-hour SMA near 1,743.00. If the given moving averages hold, it is likely that gold could consolidate against the US Dollar in the short run.
Hourly Chart
On the daily candle chart, the metal is overbought, as its price is far above the daily simple moving averages. The most close by 55-day SMA was located at the 1,655.00 mark. Due to that reason sideways trading on the daily chart was expected to continue.
Daily Candle
Traders are neutral on gold
On Friday, the Swiss Foreign Exchange sentiment was 52% long. During Monday's trading hours, the sentiment was 51% short.
On Tuesday, the position volume was balanced. 50% of volume was short and the other 50% were long.