This week, the top event of the week will be the announcement of the US Federal Reserve Federal Funds Rate at 18:00 GMT. The Fed is expected to hike its base interest rate from 5.00% up to 5.25%. A larger increase or no increase at all would cause a sharp adjustment of the value of the US Dollar. Subsequently all of financial markets would be impacted. Meanwhile, note that the Fed has stated that rate cuts are not going to happen in 2023.
The rate publication is scheduled to be followed by the Press Conference of the Chairman of the Federal Reserve Jerome Powell at 18:30 GMT. In most cases, comments made by the head of the central bank cause more volatility than the rate announcement. Sometimes, the comments of Powell reverse the direction of the USD.
In regards to the Fed decision, note that the head of the central bank has commented in the past that they monitor the PCE Core Inflation data. On Friday, the data set revealed that month on month the personal consumption expenditures increased by 0.3%.
XAU/USD short-term forecast
A recovery of the metal's value might encounter resistance in the 2,000.00 mark and the 2,000.00/2,010.00 range. Higher above, note that round price levels acted as resistance and support during the first half of April.
A decline of the commodity price would have to reach below 1,970.00, before approaching the February and January high levels at 1,960.00 and 1,949.00.
XAU/USD daily charts review
On the daily candle chart, the metal has been struggling to move since mid-April, as the price remains near 2,000.00. It could be due to the fact that the markets expect the Federal Reserve Rate hike.Daily Candle Chart
Traders are long
On Monday, gold traders were bullish, as 55% of open positions were long.
Meanwhile, pending trade orders in the 1000 point range around the current price were 100% to buy the metal.