At mid-day on Wednesday, the yellow metal pierced technical resistance at 1,722.00 and immediately reached for the 1,725.00 level.
Moreover, the metal no longer had any technical resistance as high as 1,773.62. However, it does not mean that a surge is about to occur, as a major Federal Reserve is scheduled for 18:00 GMT.
At 18:00 GMT the US Federal Reserve is scheduled to make a rate announcement and FOMC Statement.
Prior to that, a minor reaction could be caused by the US CPI at 12:30 GMT.
In addition, economic calendars show the US PPI and Unemployment Claims on Thursday. The last PPI release caused a move below normal volatility.
XAU/USD short-term forecast
It is likely that yellow metal could gain support from the 200-hour SMA near 1,715.40 and trade upwards in the short term. In this case the rate could target the 1,740.00 mark.
However, take into account that the release of the Federal Reserve information could immediately crash the technical charts. New fundamental information about the US Dollar supply could cause a sharp move up or down, depending on how the money supply is expected to change.
Hourly Chart
On the daily candle chart, it might appear that the 55-day SMA provided the support to the metal's surge. However, that is not the case, as it was broken on Friday. Afterwards, the rate traded in limbo around it without being impacted by the technical level.
Daily Candle
Long sentiment changes after long stagnation
Since Thursday, on the Swiss Foreign Exchange 58% of open position volume was in long positions.
On Wednesday, the sentiment changed, as 57% of volume was long.
Meanwhile, in 1000 pip range around the current metal's price, 59% of set up pending orders were set to sell the metal.