Gold continues to trade with high volatility. After touching the 1,355.00 level on Tuesday, the metal plummeted back down to 1,340.00 in the next hours.
In general, wait for the FOMC announcement at 18:00 GMT to find out, where the metal will go in the near future because of changes in the supply of the US Dollar.
On Wednesday, at 18:00 GMT the Federal Reserve is making its FOMC Statement, Federal Funds Rate and Economic Projections. Afterwards, at 18:30 GMT the FOMC Press Conference will take place.
XAU/USD short-term forecast
During the previous trading session, the XAU/USD exchange rate tried to surpass the psychological level at 1,355.00.
Given, that gold is supported by the 55– and 100-hour SMAs, currently located at 1,342.96, it is likely, that bulls could prevail in the market. A possible upside target is the range between the 1,350.00 and 1,355.00 levels.
From the other hand, the exchange rate could trade sideways between the psychological levels, located at 1,345.00 and 1,350.00 respectively.
It is unlikely, that some downside potential could prevail in the market, and the price for gold could drop lower than the 1,333.67/1,333.34 range due to the support of the 200-hour SMA and the monthly R2.
Hourly Chart
On the daily candle chart, the rate looks like consolidating in the borders of an ascending pattern. In theory it should resume its surge by July.
Meanwhile, the daily candle simple moving averages indicate that the metal is overbought, as all of the SMAs are below the 1,310.00 level.
Daily Chart
Traders remain short on gold
Since Monday, 58% of all open position volume on the Swiss Foreign Exchange was in short positions.
On Wednesday, traders became 56% short. Some have closed their short positions and some have opened new long positions.
Meanwhile, in the 1000 base point range around the current metal's price 57% of pending orders were set to sell.