Gold on Wednesday traded almost flat. In general, the last three daily candles looked almost insignificant, compared to the price action last week.
However, take a look at the short term analysis part. The hourly chart reveals some new information.
As it is accustomed, the last week of the month is set to be quiet for fundamental macroeconomic data releases.
The macro week will start on Wednesday. At 13:30 GMT the Canadian CPI data will be published.
On Thursday the US Advance GDP will be released at 13:30 GMT. This event can cause moves of around 20 base points.
On Friday, the Canadian GDP data will be out at 13:30 GMT. It is most likely set to be the event which will cause the biggest move during this week.
For more information watch the weekly calendar analysis stream on our YouTube channel.
XAU/USD short term forecast
On Wednesday, gold price ignored the 55 and 200-hour simple moving averages. The price fluctuated around them freely. Meanwhile, the resistance of the 100-hour SMA was still able to push the pair lower.
A decline of the commodity is still expected, as the previous support levels have moved above the price and begun to provide resistance.
Meanwhile, take into account that round price levels are providing psychological support. For example the most recent small scale surge was caused by the support of the 1,324.00 level.
Hourly Chart
On the daily chart the rate reveals that the monthly R1 of the simple pivot points provided the resistance that started the decline.Meanwhile, note that the closest support on the daily chart was the 1,310.00 level. Close by was located a monthly PP and the lower trend line of the ascending pattern.
Daily Chart
Traders ride the downwards move
Traders have been largely shorting the metal throughout last week. This week, the situation had not changed.
Since the middle of Tuesday's trading 65% of the total open position volume on the Swiss Foreign Exchange was short.
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 62% of orders were set to buy.
The buy orders might be the take profits and stop losses of the short positions.