After trading sideways for two consecutive days and consolidating its decline, on Thursday gold broke resistance levels and signalled a surge.
Namely, the 55 and 100-hour simple moving averages were broken by the middle of London's trading. The rate had no technical resistance levels as high as 1,284.00.
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 rate broke the resistance of the 55 and 100-hour simple moving averages.
The rate has no technical resistance as high as 1,284.00 level. It is expected to reach that level by the end of this week.
On the other hand, the metal's surge might be stopped by psychological effect of round levels. For example, the 1,280.00 and 1,282.00 levels could stop gold.
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 last 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
Meanwhile, in the 1000 base point range around the current price 55% of pending orders were set to buy the metal.
Most likely these orders were the stop losses of the short positions.