The scenario of the metal's price surge up to the 1,670.00 level has become reality. The metal reached the target shortly before GMT midnight hours.
On Tuesday, after touching the 1,675.00 level, the price began a decline, which was finding support in the 1,650.00 level.
As it occurred during the last week, due to the fundamental changes in the markets, Dukascopy Analytics suggest to note the scheduled macroeconomic events, but avoid using historical data for guidance.
Namely, the whole world changes the money supply by announcing monetary stimulus and government expense increases. In other words, the central banks are creating more money and giving it to governments to stop the effects of the coronavirus. In effect, each announcement causes a fall of the currency that it affects.
However, click on the link and take a look at the last reactions to various events in March. Even already ignored events like Producers Price Index and Consumer Price Index caused notable reactions. Previously, the release of these data sets did not cause an increase of exchange rate volatility.
XAU/USD short-term forecast
From the one hand, it is likely that bulls could continue to prevail in the market, and gold could appreciate against the US Dollar. In this case the rate could target the 1,690.00 level.
From the other hand, it is likely that yellow metal could consolidate against the Greenback in the 1,660.00 area within the following trading session.
Hourly Chart
On the daily candle chart, note that the rate is slightly overbought, as the price has left below it the daily simple moving averages. In addition, take into account that the 1,700.00 level should provide resistance just as it did in March.
Daily Chart
Traders are long on gold
For a whole week, the Swiss Foreign Exchange sentiment was 55% long. Namely, 55% of open gold position volume was in long positions.
On Monday, the sentiment had changed and remained the same, as 54% of open position volume was in long positions.