On Wednesday, gold prices were signalling that they are about to decline, as the commodity price was piercing the support of the 200-hour simple moving average.
On the hourly chart, there are no other support levels besides the mentioned SMA as low as the 1,280.00 level.
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
The meeting summary stated, "With an increase in the target range at this meeting, the federal funds rate would be at or close to the lower end of the range of estimates of the longer-run neutral interest rate, and participants expressed that recent developments, including the volatility in financial markets and the increased concerns about global growth, made the appropriate extent and timing of future policy firming less clear than earlier."
Gold will be impacted by the US data releases
On Wednesday, fundamental events continued in full force. The UK Parliament was set to vote in a confidence vote, which would remove Theresa May from her post.Meanwhile, macro release traders were looking forward to the weekly US Energy Information Administration Crude Oil Inventories at 15:30 GMT. The event causes larger than one percent moves in oil prices each week.
Besides a speech at the G20 Meetings by Bank of Japan's Governor Kuroda at 03:20 GMT, there is nothing on Thursday to watch.
On Friday, two data releases will be covered by Dukascopy Analytics.
At 09:30 GMT the UK Retail Sales will be published. Around 10-40 base point move can be expected during the event.
The biggest event of the will occur at 13:30. The Canadian CPI will be published. On the USD/CAD there are 30 pip moves even when it hits the forecast. When the data is different there have been 40-85 pip moves.
XAU/USD short term forecast
During the previous trading day, the yellow metal traded sideways to stay at the 1,288.00 level. On Wednesday morning, the gold was trading between the simple moving averages at 1,290.37.
In regards to the near-term future, most likely, the yellow metal will break the resistance levels of the 55-hours and the 100-hours SMAs to trade at 1,292.00. Besides, the 200-hour simple moving average will support the surge.
On the other hand, the SMA might not hold and the metal would fall as low as 1,280.00.
Hourly Chart
A large scale review of the yellow metal's daily chart has been conducted. Zoom out the chart to see more details.In general we have identified three patterns, which represent three various large scale trends. Two of the patterns are junior to the dominant one and have guided the commodity price into the upper trend line of the largest pattern.
The commodity price is set to test and make one attempt after another to pass the upper trend line of the just mentioned pattern near the 1,300.00 mark.
From a fundamental large scale perspective, if the US Federal Reserve slows down their restrictive monetary policy, then the US Dollar would lose value. In that case gold prices will surge above the 1,300 level.
It could occur through a sudden jump caused by a Federal Funds Rate announcement or a press conference hosted by the central bankers.
Daily Chart
Traders short the yellow metal
Traders continued to short the metal, as since Tuesday 60% of open gold positions on the Swiss Foreign Exchange were short.
In the meantime, trader pending orders in the 1000-base point range had become neutral.
In general, traders wait for a decline, but the retail sector will not cause the decline of the yellow metal, as their buy and sell orders are balanced.