In general, Jerome Powell stated on Tuesday that the Fed needs more data before cutting interest rates. On Wednesday, various US data sets were released either below expectations or at forecast. This caused the drop of the USD. The price for gold surged not due to higher demand, but due to lower value of the underlying currency.
Meanwhile, a couple of aspects were spotted on Thursday. First of all, the 2.350.00 mark acted as both resistance and afterwards as support. Secondly, the metal has recovered in a channel up pattern. Economic Calendar Analysis
On Friday, the top event of the week will take place. At 12:30 GMT, the United States employment data sets will be published. This release is most certainly going to create volatility.
XAU/USD short-term forecast
A continuation of the surge of the price could face resistance in the 2,370.00 level, which was almost reached in late June. Higher above, either the upper trend line of the pattern will slow down the metal or the 2,400.00 mark.
On the other hand, a decline is set to find support in the 2,350.00 level and the approaching 50-hour simple moving average. Further below, there is a cluster of levels that could turn into support. Namely, take into account the 2,340.00 level, the 100-hour simple moving average and the lower trend line of the channel up.
XAU/USD daily charts review
Prior analysis: "On the daily candle chart, note the additional support from the approaching 100-day simple moving average near 2,300.00. In the meantime, the 50-day SMA appears to have turned into resistance. This situation could return into a squeeze that would be then followed by a sharp break-out move."The fundamental data has shown the direction by providing the needed strength to move the price above the 50-day simple moving average.
Daily Candle Chart
Traders add short positions
Since last week, traders were 59% short, as that proportion of all open position volume was in bearish positions.
In the meantime, pending orders in the 1000-point range around the current pair orders were 70% to sell.
On Thursday, trader positions were 65% short and pending orders were 60% to sell. As gold has moved higher, traders have added to their short positions.