After touching the low levels below the 1,280.00 mark gold has retraced back up to the resistance of a descending channel pattern.
Main attention is set on this lone trend line at the 1,285.00 level and the approaching resistance of the 200-hour simple moving average, which during the middle of the day was located at the 1,286.00 level.
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
The meeting summary stated, "With an increase in the target range at this meeting, the federal funds rate would be at or close to the lower end of the range of estimates of the longer-run neutral interest rate, and participants expressed that recent developments, including the volatility in financial markets and the increased concerns about global growth, made the appropriate extent and timing of future policy firming less clear than earlier."
Week's releases are over
The week's macroeconomic data releases are over. Meanwhile take into account that there will be no data releases that are worth covering also on Monday.Instead watch the weekly Economic Calendar Analysis stream at 12:00 GMT on Monday. During the stream the whole week's calendar will be laid out to the participants.
XAU/USD short term forecast
On Friday morning, the yellow metal was trading between the 200-hour and the 55-hour simple moving averages at the 1,283.19 mark.
In regards to the near-term future, most likely, the 200-hour simple moving average will retrace the gold to the 1,276.00 level.
On the other side, the 55-hour and the 100-hour simple moving averages could support the rate to break the resistance of the 200-hour SMA to the 23.60% Fibonacci retracement level at the 1,291.57 mark.
Hourly Chart
On the daily chart it can be observed that the commodity price has retreated from making attempts at passing the upper trend line of a dominant descending channel pattern.The metal is set to head lower and reveal a descending pattern in the upcoming weeks.
However, note that the Federal Reserve announcements next week might still weaken the US Dollar and push the XAU/USD pair up to the 1,290.00 level where the upper trend line of the most dominant pattern will be located at the time.
Daily Chart
Short sentiment decreases
Previously, for more than a week the Swiss Foreign Exchange open positions were short in 57% of all cases. The sentiment decreased to 55% on Thursday.
In the meantime, trader pending orders in the 1000-base point range had become bullish. Namely, 55% of trader set up orders on the Swiss Foreign Exchange were set to buy the metal.
The biggest difference, compared to Thursday, was that some traders had close by buy orders. Those might be the close by stop losses of the short positions that are closer now due to the recent surge.