Previously, gold was squeezed in on the daily candle chart. This resulted in a break-out. The break-out moved up and broke the long term channel down pattern, which guided the metal's price since August.
In regards to the short term forecasts, the rate was testing the resistance of the 1,935.00 level. Future depended on whether or not this resistance level holds.
The first week of the year is bound to have notable data releases. The top among them are the release of the US Federal Open Markets Committee Meeting Minutes and the US monthly employment data sets.
On Tuesday, at 15:00 GMT, a minor move could be caused by the release of the US ISM Manufacturing PMI.
On Wednesday, the mentioned FOMC Meeting Minutes are set to be released at 19:00 GMT.
On Thursday, at 13:30 GMT, the US Unemployment Claims could cause a minor move on USD pairs and assets. In addition, on the same day, at 15:00 GMT the US ISM Non-Manufacturing PMI results will be published.
The week will end with the release of three US employment data sets. The releases will occur on Friday at 13:30 GMT.
Click on the link below to find out more about the data releases.
XAU/USD short-term forecast
During Monday morning hours, the XAU/USD exchange rate jumped to the 1,935.00 mark.
Given that yellow metal is trading far above the 55-, 100– and 200-hour SMAs, it is likely that the commodity is in the overbought area. Thus, some downside potential could prevail in the market.
On the other hand, a bounce off from the resistance would once again look for support. The support could be provided by the 55, 100 and 200-hour simple moving averages in the 1,880.00/1,875.00 area.
In the meantime, note that there is no technical resistance for the XAU/USD rate. Thus, the price for gold could continue to raise within the following trading session.
Hourly Chart
On the daily candle chart, the price has broken the resistance of the pattern, which guided the rate since August. In addition, on Monday, the pair had pierced the resistance of the 23.60% Fibonacci retracement level at 1,928.61.
In the meantime, note that the channel up pattern, which captures the metal's December surge, remains intact. This pattern could continue to guide the rate in January.
In addition, note that the November high level could provide the pair with resistance near 1,960.00.
Daily Candle Chart
Sentiment changes
Since Monday, December 28, on the Swiss Foreign Exchange 60% of open position volume was long.
On January 4, the sentiment was 58% long, as some traders might have taken profits.
Meanwhile, in the 1000-pip range around the metal's price the pending orders were 56% to buy the metal