Last week, the yellow metal broke the resistance zone near 1,725.00 and surged above it. Afterwards, the zone was confirmed as support before the surge of the commodity price resumed.
On Tuesday, the bullion's price was heading to the resistance zone above the 1,745.00 level. This zone provide the metal with resistance during the second part of March. Namely, it reversed an attempted recovery.
On Wednesday, at 1900 GMT, the US Federal Open Markets Committee is set to publish its Meeting Minutes.
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XAU/USD short-term forecast
In the case of the metal passing above the 1,745.00 level, the price could find resistance first in the round price level at 1,750.00 and afterwards the March high level near 1,755.00. If all of these levels would be passed, the price might reach for the 1,800.00 level.
On the other hand, a decline from the 1,745.00 level should look for support in the mentioned zone near 1,725.00. In addition, the 55, 100 and 200-hour simple moving averages could provide support.
Hourly Chart
On the daily chart, the support zone of the March low levels is not made up only of the recent lows. Research the 2020 March high levels and the 2020 April to June low levels. The zone was providing both resistance and support during last year.
Most recently, on Tuesday, the price passed the resistance line, which kept the metal declining throughout 2021. Namely, the described support zone provided enough support of the metal to break the resistance line.
Daily Candle Chart
Short term traders take profits
On Tuesday, the sentiment on the Swiss Foreign Exchange was bullish, as 67% of open position volume was long.
Note that the gold sentiment is largely bullish at all times due to long term holders. It is quite rare for it to be below 70%. Due to that reason, on Tuesday, it was assumed that short term traders had closed their long positions and probably opened short positions.
Meanwhile, in the 1000-pip range around the metal's price the pending orders were 51% to buy the metal.