Gold has hit a new high level. Namely, the 1,440.00 level was touched on Tuesday morning.
Another important update to note is that the 55-hour simple moving average continued to remain close by below the yellow metal's price. It serves as a good overbought indicators, as the metal retraces back down as soon as the SMA is too far away.
Federal Reserve released the FOMC Statement, where the US policymakers provided in-depth insights into the economic and financial conditions that influenced their vote on maintaining the Federal Funds Rate unchanged. Note, that FOMC Economic Projections were released at the same time.
The Fed suggested that it would cut the interest rate in 2020. The median target for the federal funds rate remains 2.4% for 2019. Note, that the Federal Reserve has not cut the rate since the financial crisis. However, recent employment data set and inflation data releases have led analysts to forecast cut rates in the future.
Economic Calendar Analysis
The data that is noted by the financial markets as important starts on Wednesday. On that day, the US Durable Goods Orders and Core Durable Goods Orders will be published at 12:30 GMT.
On Thursday, the US Final GDP will be published at 12:30 GMT. This is the least important GDP of the three quarterly publications of the US GDP.
The full review of all of the notable events is available in video on the Dukascopy Webinars YouTube channel.
XAU/USD short-term forecast
Gold has reached a new high level. On Tuesday morning, the bullion tested the resistance of the 1,440.00 level.
It can be observed that the surge is occurring together with the 55-hour SMA below the commodity price. From a technical analysis perspective this is the only close by level. It indicates that the metal is not massively overbought, as the surge has happened somewhat gradually.
On the other hand, take into account that the surge is a run to safety caused by fundamental monetary policy of the US Federal Reserve.
Hourly Chart
The last trend lines that could have stopped the surge of the metal have been broken. There is no technical resistance on the daily chart to the metal's price.
Due to that reason a chart with historical high levels is presented below. These levels are likely going to provide some resistance to the surge, if it continues.
Daily Chart
Short position volume remains unchanged
Since Friday, traders continued to be short on gold. On the Swiss Foreign Exchange 54% of open gold position volume was in short positions.
Meanwhile, in the 1000 base point range around the current metal's price the orders were bullish. 72% of orders were set to buy.
Stop losses of short positions and buy to open long orders had become dominant from Thursday to Friday.