Gold jumped during the second half of Monday's London session due to tariffs being put on the US by China.
In general, it will decrease the total US exports to China, which in fact decreases the demand for the US Dollar, in which the goods are bought. As the USD falls, all other currencies and commodities gain value against it.
During this week there will be a couple of macroeconomic events, which are notable enough to impact currency exchange rates.
On Tuesday morning, the UK Average Earnings Index will be published at 08:30 GMT. This event is the second to the Bank of England rate announcement. Historically the event has caused moves from ten to 24 base points on the GBP/USD.
On Wednesday, Aussie traders have to watch out for the Australian Wage Price Index publication at 01:30 GMT. It is the Australian equivalent of the UK Average Earnings Index.
During the same day, at 06:00 GMT and at 09:00 GMT GDP data will be published in the European Union. Namely, at 06:00 GMT watch the German Preliminary GDP release and at 09:00 GMT the flash EU GDP will be out.
These data sets are not the ones that usually cause big moves. However, during the recent months we have seen changes in that. The EU data has resumed to cause moves on the EUR pairs.
Also on Wednesday, the Canadian CPI and US Retail Sales will be published at 12:30 GMT. The CPI caused moves of 23 to 61 pips since December on USD/CAD. Meanwhile, the US retail sales have created moves from 12 to 40 base points on EUR/USD.
Early on Thursday, at 01:30 GMT the official Australian employment change will be published. The data is expected to cause a minor impact. This event is the last notable of the week.
Watch this week's economic calendar analysis and leave comments with questions about the specifics.
XAU/USD short-term forecast
The fundamental surge of the yellow metal was stopped by the psychological resistance of the 1,300.00 level. All other technical levels were ignored.
From a technical perspective, if the 1,300.00 level gets passed the rate should target the monthly pivot point level at 1,308.05.
On the other hand, after such sharp surge a consolidation by trading sideways or retracing back down should occur. In these scenarios the metal's price should remain below the 1,300.00 level.
Hourly Chart
On the daily candle chart the commodity price has broken the strong resistance cluster near the 1,290.00 level.Namely, the upper trend line of a channel down pattern, a 23.60% Fibonacci retracement level and two daily simple moving averages were ignored during the fundamental jump of the metal's price.
Daily Chart
Short sentiment remains intact
Since Wednesday, 64% of open position volume on the Swiss Foreign Exchange was in short positions.
On Monday, the sentiment increased to 67%. It could have happened due to gold bulls taking profit from the sudden jump.
Meanwhile, in the 1000 base point range around the current price 59% of pending orders were set to buy the metal.
These orders might be the close by stop losses of the short positions just above the 1,300.00 level.