As expected, gold surged on Thursday. The upwards move occurred in a sharp surge at the middle of the day. Moreover, the metal's price gained more than it was expected.
On Friday, the metal had bounced off resistance and declined down. The decline was expected to reach the 1,280.00 level.
The week will end with the US Durable Goods Orders and Core Durable Goods Orders on Friday at 12:30 GMT. This event has been rather non-eventful in the past half a year, as it has caused moves of only five to 18 pips.
XAU/USD short-term forecast
On Thursday, the price for gold skyrocketed the resistance level formed by the monthly PP at the 1,287.27 mark.
Given that the XAU/USD exchange rate is pressured by the 200-hour SMA, currently located at 1,284.88, it is likely, that some downside potential could prevail in the market, and gold could target the support level formed by a combination of the 55– and 100-hour SMAs circa 1,278.00.
If the given support level does not hold, it is expected, that the price for gold could fall to the Fibonacci 38.20% retracement at 1,273.68. Also, note, that the rate is trading near the upper boundary of the short-term descending channel, thus, it is unlikely, that some upside potential could prevail in the market.
Hourly Chart
The daily candle chart has been upgraded. The main update to mention is the fact that the previous descending pattern was junior to a larger channel down pattern.Due to that reason the rate is expected to gradually reach the upper trend line of the dominant pattern.
However, it can occur in various ways – by surging, trading sideways or declining.
Daily Chart
Swiss traders short gold
Since the previous Thursday, 68% of all total open gold position volume on the Swiss Foreign Exchange was in short positions.
A majority of traders was profiting from the decline for a week.
It ended on yesterday, as during the surge short positons were closed. The sentiment was 65% short on Friday.
Meanwhile, in the 1000 base point range around the current price 57% of pending orders were set to buy the metal.
Most likely these orders were the stop losses of the short positions.