The yellow metal stopped its decline near the 1,405.00 level. The event occurred due to a relieve of the overbought pressure, as indicated by the 55 and 100-hour SMAs being above the commodity price.
In general, the metal is expected to trade sideways until new fundamental news reveal its future direction.
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
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
On Thursday morning, the yellow metal's price declined below the 100-hour simple moving average and was kept up by the psychological support of the 1,405.00 level.
From a technical perspective, the commodity price should decline down to the support of the 200-hour simple moving average, which on Thursday morning was located above the 1,380.00 level.
Although, it is more likely that a decline will be stopped by the support of the 1,400.00 level. The commodity price then would trade above this level until it would get squeezed in by simple moving averages or fundamental changes take place.
Namely, the 200-hour SMA would support the price and the 55 and 100-hour SMAs would pressure the metal from above.
Hourly Chart
On the daily chart, it can be observed that the decision to mark historical high levels was a correct one.
Namely, one can observe that the zone surrounding the August 2013 high level provided resistance to the commodity price.
Daily Chart
Short position volume remains unchanged
June 21, 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 had become neutral on Thursday. 53% of orders were set to sell and 47% of orders were to buy.
On Wednesday, 89% of orders were set to buy. Traders closed these orders during the decline and sideways trading.