Just before midday GMT hours, the yellow metal passed the support of the 55-hour simple moving average, which had kept the commodity price up throughout the first half of the day.
Due to the passing of the SMA, the price was expected to reach for the support of the 1,640.00 level, which would soon be strengthened by the 100-hour SMA.
As it occurred during the last week, due to the fundamental changes in the markets, Dukascopy Analytics suggest to note the scheduled macroeconomic events, but avoid using historical data for guidance.
Namely, the whole world changes the money supply by announcing monetary stimulus and government expense increases. In other words, the central banks are creating more money and giving it to governments to stop the effects of the coronavirus. In effect, each announcement causes a fall of the currency that it affects.
However, click on the link and take a look at the last reactions to various events in March. Even already ignored events like Producers Price Index and Consumer Price Index caused notable reactions. Previously, the release of these data sets did not cause an increase of exchange rate volatility.
XAU/USD short-term forecast
In regards to the near term future, the metal's price was expected to test the support of the 1,640.00 level.
In the case of the round level failing to stop the rate's decline, the yellow metal would look for support in the 100-hour SMA, which was located above the 1,630.00 mark. In the case of the 100-hour SMA failing, next up the 200-hour SMA near 1,620.00 could be reached.
On the other hand, the 1,640.00 could hold. In this case the rate would test the resistance of the 1,650.00 level, which would be strengthened by the 55-hour SMA.
Hourly Chart
On the daily candle chart, note that the rate is slightly overbought, as the price has left below it the daily simple moving averages. In addition, take into account that the 1,700.00 level should provide resistance just as it did in March.
Daily Chart
Gold sentiment stagnates
For a whole week, the Swiss Foreign Exchange sentiment was 55% long. Namely, 55% of open gold position volume was in long positions.
On Monday, the sentiment changed, as 54% of open position volume was in long positions. It had not changed since then by the middle of Wednesday.