On Thursday, the yellow metal's price continued the recovery, which started in the aftermath of dropping to the 1,690.00 mark.
In the near term future, the commodity price was set to test the resistance of three SMAs and a pivot point near the 1,720.00 level.
The week will end with the US data set release on Friday 12:30 GMT.
XAU/USD short-term forecast
On the one hand, it is likely that some upside potential could prevail in the market. In this case it is unlikely that the price for gold could exceed the 1,720.00 area due to the resistance formed by the 55-, 100– and 200-hour SMAs, as well the monthly PP.
On the other hand, it is likely that yellow metal could trade sideways against the US Dollar in the 1,700.00/1,710.00 area within the following trading session.
Hourly Chart
On the daily candle chart, note that the high levels of August 26, February 21, March 9 and April high levels can be connected in a resistance trend line.
Meanwhile, the daily simple moving averages are approaching the commodity price. The 55-day SMA could provide the needed strength for the price to push through the resistance of the 1,750.00 level.
Daily Candle
Long sentiment increases
Despite the decline of the commodity price, traders have become more bullish on the metal.
On Wednesday, on the Swiss Foreign Exchange 55% of open position volume was in long positions. Before that, during Tuesday's trading, 54% of volume was long.
On Thursday, the sentiment was 58% long.
In addition, in 1000 pip range around the current metal's price, 68% of set up pending orders were set to buy the metal. On Wednesday, 59% were to buy,