Gold prices are following the simple moving averages of the hourly chart. Namely, the 55-hour SMA is providing resistance. Meanwhile, the 200-hour SMA has been supporting the metal.
In general, the two levels are expected to meet in the near future and cause a break out.
As it is accustomed, the last week of the month is set to be quiet for fundamental macroeconomic data releases.
The macro week will start on Wednesday. At 13:30 GMT the Canadian CPI data will be published.
On Thursday the US Advance GDP will be released at 13:30 GMT. This event can cause moves of around 20 base points.
On Friday, the Canadian GDP data will be out at 13:30 GMT. It is most likely set to be the event which will cause the biggest move during this week.
For more information watch the weekly calendar analysis stream on our youtube channel.
XAU/USD short term forecast
The gold price is listening to the simple moving averages of the hourly chart.
Namely, the 200-hour SMA is providing support and keeping the rate from falling lower. In the meantime the 55 and 100-hour SMAs are providing resistance.
In general, the commodity price should get squeezed in between the simple moving averages. The 200-hour SMA will push higher until it will meet with the 55-hour SMA. At that moment or even before that a break out should occur. A break out could go both ways - up or down.
Hourly Chart
On the daily chart the rate reveals that the monthly R1 of the simple pivot points provided the resistance for the decline.Meanwhile, note that the closest support on the daily chart was the 1,310.00 level. Close by was located a monthly PP and the lower trend line of the ascending pattern.
Daily Chart
Traders ride the downwards move
Traders have been largely shorting the metal throughout last week. The situation had not changed on Monday.
By the middle of Monday's trading 67% of the total open position volume on the Swiss Foreign Exchange was short.
Meanwhile, the trader set up pending orders in a 1000 base point range around the metal's current price reveal additional information.
Namely, trader pending orders were mostly set to buy the commodity, as 60% of orders were set to buy.
The 60% of buy orders might be the take profits and stop losses of the short positions.