After reaching above 1,355.00 on Friday, gold declined down to the technical support levels near 1,333.67.
In general, the commodity was overbought and by retreating back down to the hourly simple moving averages the pressure of being overbought was gone.
On Wednesday, at 18:00 GMT the Federal Reserve is making its FOMC Statement, Federal Funds Rate and Economic Projections. Afterwards, at 18:30 GMT the FOMC Press Conference will take place.
XAU/USD short-term forecast
During the previous trading session, the XAU/USD exchange rate plummeted to the 1,340.00 level. During today's morning, the rate dropped to the support level formed by the 100– and 200-hour SMAs, as well the monthly R2 at 1,333.67
If the given support holds, it is expected, that a reversal north could occur in the nearest future. However, note, that the rate is pressured by the 55-hour SMA, currently located at 1,342.24.
If the given support does not hold, it is likely, that the price for gold could continue to decline. A possible downside target is the psychological level at the 1,325.00 mark.
Hourly Chart
The daily candle chart has been updated with long term patterns. In general, the rate looks like consolidating in the borders of an ascending pattern. In theory it should resume its surge by July.
Meanwhile, the daily candle simple moving averages indicate that the metal is overbought, as all of the SMAs are below the 1,300.00 level.
Daily Chart
Traders are short on gold
On Monday, 58% of all open position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 1000 base point range around the current metal's price 80% of pending orders were set to sell.