As speculated on Tuesday, the approaching of the support of the 100-hour SMA provided the needed strength for the yellow metal's price to surge.
By the middle of Wednesday's GMT trading hours, the commodity price had reached above the 1,750.00 level.
This week, Markit is going to publish the US Flash Manufacturing PMI survey results on Thursday, May 21, at 13:45 GMT. It could affect gold prices through the strength of the US Dollar.
XAU/USD short-term forecast
It is likely that the yellow metal could gain support from the 55-hour moving average and continue to appreciate against the US Dollar in the short run. In this case the rate could target the 1,765.00 level, which caused a decline last week.
However, if the exchange rate fails to exceed the 1,765.00 level, it is likely that gold could trade sideways against the Greenback in the short term.
Also, it is unlikely that bears could prevail in the market, and the price for gold could decline below the 200-hour SMA near 1,725.00.
Hourly Chart
On the daily candle chart, it was spotted on Wednesday that the high levels of August 26, February 21, March 9 and April high levels can be connected in a resistance trend line. This trend line provided resistance to the metal on Monday.
Daily Candle
Traders are neutral on gold
During Monday's trading hours, the sentiment was 51% short.
Since Tuesday, the position volume was balanced. 50% of volume was short and the other 50% were long.