On Monday, the yellow metal's price tested the resistance of the 1,640.00/1,645.00 zone. This zone stopped the metal's attempts to surge in late March.
The commodity price's future was based upon what would happen in the zone.
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
During the previous trading session, the XAU/USD exchange rate consolidated in the 1,620.00 area. During Monday morning, the rate raised to the local resistance level at 1,640.00.
From the one hand, it is likely that bulls could prevail in the market, and gold could continue to appreciate against the US Dollar. In this case the rate could target the psychological level at 1,660.00.
However, if the given resistance holds, it is likely that a reversal south could occur in the nearest future. However, it is unlikely that the price for gold could drop below the support formed by the 55-, 100– and 200-hour SMAs in the 1,603.00/1,613.00 area.
Hourly Chart
On the daily candle chart, the metal's price has the support of the 55-day simple moving average, which on Monday was located near the 1,590.00 level.
Daily Chart
Sentiment slightly changes
For a whole week, the Swiss Foreign Exchange sentiment was 55% long. Namely, 55% of open gold position volume was in long positions.
Traders remained slightly long on the metal despite the recently experienced decline.
This Monday, the sentiment changed, as 54% of open position volume was in long positions.