On Thursday gold prices declined lower, as the metal was consolidating its gains in the aftermath of the previously experienced sudden jump to the 1,345.00 level.
However, the current decline was longer than the consolidating decline, which followed the last week's surge upwards.
Meanwhile, the lower trend line of an ascending pattern was providing support together with the 100-hour SMA at the 1,331.00 level.
The week will end with the Canadian Core Retail Sales at 13:30 GMT on Friday.
The event is scheduled to be covered by Dukascopy Analytics on our Dukascopy Webinars YouTube channel. The stream starts ten minutes before the data release.
For more information watch the weekly Calendar Analysis stream recording.
XAU/USD short term forecast
During Wednesday's trading session, the yellow metal traded sideways to appreciate against the US Dollar by 38 pips or 0.03%. On Thursday morning, the rate was located at the 1,335.74 mark.
In regards to the near-term future, the 100-hour simple moving average will support the gold to break the resistance of the monthly R1 at 1,340.10. Most likely, the yellow metal will end the trading session at the 1,340.00 level.
Hourly Chart
The ascending pattern on the daily chart remains intact. If the metal trades in accordance with the pattern, the upper trend line of it will slow down the surge.Although, the metal can still continue to surge to the monthly R2 at 1,358.11 at a different angle. The difference from the recent past will be that the surge will take longer time.
On the other hand, sideways trading above the support of the monthly R1 at 1,340.10 or a decline below it are still possible.
Daily Chart
Traders ride the downwards move
Traders had been 67% short on gold since Tuesday. By the middle of Thursday's trading 69% of total open volume on the Swiss Foreign Exchange was short.
In general, traders are taking advantage of the current decline.
Meanwhile, the trader set up pending orders in a 1000 base point range around the metal's current price reveal additional information.
Namely, trader pending orders were mostly set to buy the commodity, as 66% of orders were set to buy. Previously the sellers were prepared to sell, which caused the increase of short volume that is described above.
The 66% of buy orders might be the take profits and stop losses of the short positions.