Gold has continued to trade with high volatility. By the middle of Thursday's trading session gold prices had declined below most close by technical support levels.
In general, the rate was expected to continue its decline until it reaches the support of a 38.20% Fibonacci retracement level at 1,273.68.
On Thursday, at 12:30 GMT the US Preliminary GDP will be published. This event, which is considered and shown on the calendars as a top mover, has not caused notable moves.
Since November 2017 this event has caused on the EUR/USD moves from 6.8 to 11.9 pips during the five minutes after the release. Note that a move below ten pips on the EUR/USD during five minutes happen often without any data being published.
The week will end with the Canadian GDP publication at 12:30 GMT. This event has caused moves from 21 to 64 pips since December.
XAU/USD short-term forecast
On Wednesday, the XAU/USD exchange rate dropped to the psychological level at the 1,278.00 mark. During today's morning, the rate maintained south direction.
It is expected, that the price for gold could continue to decline. A potential downside target is the support level formed by the Fibonacci 38.20% retracement at 1,273.68.
From a technical point of view, it is unlikely, that gold could exceed the 1,279.58/1,282.75 range in the short term due to the resistance cluster formed by the 55-, 100– and 200-hour SMAs.
Hourly Chart
On the daily candle chart the recent low levels of May have provided the needed reference points to draw an ascending channel pattern.In general, it is expected that this pattern guides the rate up until August.
However, the rate first needs to pass the strong resistance of the levels near the 1,290.00 mark.
Daily Chart
Traders remain short on Gold
The SWFX sentiment was 64% short on Thursday. Namely, 64% of open position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 1000 base point range around the current price 62% of pending orders were set to buy the metal.
Previously, most orders were set to sell the metal.