Gold booked a new high level on Tuesday. Although, it seems like the surge is over, as a consolidating short term decline could be observed by the middle of the day's London trading session.
In general, the metal was expected to resume its surge, as soon as the support of a pivot point at 1,320.00 gets strengthened by the 55-hour simple moving average.
On Wednesday, a minor move might be caused by the ISM Non-Manufacturing PMI at 14:00 GMT.
On Thursday, all attention will be on the European Central Bank. At 11:45 GMT the Monetary Policy Statement will be published. On the release the EUR/USD has moved from 10 to 35 pips.
The event will be followed by the ECB press conference at 12:30 GMT. During the questions and answers session at the end of it the EUR is bound to make sharp moves.
At the same time the Canadian Trade Balance will be published. This event has caused moves from ten to sixty pips.
The week will end with the Canadian and US employment data being published at 12:30 GMT. This event consists of five different data sets being released.
For more details watch the Economic Calendar Overview. Moreover, feel free to ask questions for details.
XAU/USD short-term forecast
On Tuesday, gold traded above 1,325.00. Moreover, the metal's price was expected to continue to surge up to the 1,333.67 level. There the metal would meet with the resistance of the second monthly resistance of the simple monthly pivot points.
The surge of the metal was strengthened by supposed rumors that the Federal Reserve might cut interest rates. However, the sharp surge up had started already before the rumors started circulating in the financial media.
In the meantime, the commodity price is overbought, it could first trade sideways and consolidate the recent gains before resuming its move up.
Hourly Chart
On the daily candle chart it can be observed that the rate broke the resistance of the both long term patterns.Most likely after the fundamental moves end a full review of the charts will be conducted.
Daily Chart
Most traders short gold
On Tuesday, 68% of total open gold position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 1000 base point range around the current price 56% of pending orders were set to sell the metal.
Despite the surge, traders were mostly shorting gold. Moreover, they were ready to open additional short positions.