The Federal Reserve caused a sharp drop of the USD on all charts. Due to that reason the yellow metal surged to the 1,395.00 level by midnight.
On Thursday, the commodity price had retreated and was consolidating its previous gains just above the 1,380.00 level.
There will be no more scheduled events that could cause a sharp move of the USD during this week. Due to that reason no sharp moves of gold's price are expected.
Meanwhile, note that on Monday the weekly Economic Calendar Overview will be published on the Dukascopy Webinars YouTube channel.
XAU/USD short-term forecast
Yesterday, the XAU/USD exchange rate skyrocketed to the psychological level at 1,380.00. During today's morning, the rate was trying to surpass the 1,385.00 level.
From the one hand, gold could continue to appreciate against the US Dollar, as it is supported by the 55-, 100– and 200-hour moving averages, currently located in the 1,340.34/1,352.50 range. The price for gold could target the upper boundary of the long-term ascending channel located circa 1,404.00.
From the other hand, the exchange rate could reverse south, as technical indicators show that gold is in the overbought zone. It is unlikely, that the price for gold could drop lower than 1,360.33/1,366.90 due to the support of the monthly R3 and the 2018 high level.
Hourly Chart
On the daily candle chart, the price's surge went through the resistance of a junior pattern, but it was stopped by a medium scale pattern's resistance line.
Due to that reason a consolidation until the middle of July could be expected. Afterwards, the metal should have no resistance to reach the 1,400.00 level.
Daily Chart
Traders remain short on gold
On Wednesday, traders were 56% short on the Swiss Foreign Exchange. Namely, 56% of open gold position volume was in short positions.
By the middle of Thursday's trading session 55% of volume was in short positions. Traders had not closed their short positions despite the surge of the metal.
Meanwhile, in the 1000 base point range around the current metal's price 56% of pending orders were set to sell.