The 1,600.00 level has been passed by the yellow metal's price. Moreover, by the middle of Wednesday's London trading hours, the pair had reached the 1,610.00 level.
In the meantime, the pair had left below it the hourly simple moving averages, which indicates that the rate is overbought. In addition, the pair broke the upper trend line of a channel up pattern.
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XAU/USD short-term forecast
Yesterday, the XAU/USD exchange rate raised to the 1,600.00 level. During Wednesday morning, the rate surpassed the given level.
From the one hand, it is likely that yellow metal could continue to appreciate against the US Dollar in the short term. In this case the exchange rate could reach the 1,620.00 level.
On the other hand, gold could trade sideways against the Greenback in the 1,610.00 area in the short run. Meanwhile, it is unlikely that bears could prevail, and the rate could decline below the 55– and 100-hour SMAs in the 1,585.00 area.
Hourly Chart
On the daily candle chart, on Monday, Dukascopy Analytics added a new channel up pattern, which was drawn by using the February and December low levels.
In general, judging by the size of this pattern and comparing it with the pattern that guided the late 2019 decline, it is expected that the channel up could guide the price upwards during the following months.
Daily Chart
Traders are short on gold
On Wednesday, the Swiss Foreign Exchange gold sentiment was 62% short. Namely, 62% of open position volume was in short positions.
The short sentiment has been growing since Monday.
Meanwhile, in the 1000 base point range around the current metal's price the pending orders were bullish – 55% of orders were to buy and 45% to sell.
Previously, the orders were 57% to buy.