Although the metal has not gained much, the surge of gold prices continued to surge. In general, there were no large signs indicating that the surge will stop.
Both the technical and fundamental situation was indicating that a surge of the gold prices will continue and next reach for the 200-hour SMA at 1,288.40.
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
The meeting summary stated, "With an increase in the target range at this meeting, the federal funds rate would be at or close to the lower end of the range of estimates of the longer-run neutral interest rate, and participants expressed that recent developments, including the volatility in financial markets and the increased concerns about global growth, made the appropriate extent and timing of future policy firming less clear than earlier."
No influence on Gold from macro releases this week
As it is accustomed, the third week of the month is expected to be rather empty for macroeconomic data releases. Although, there are a couple of releases to look forward to this week.On Wednesday, look forward to the Canadian Retail Sales data release at 13:30 GMT. This event most likely will be the only one notable enough during the rest of the week to be traded by currency release traders.
On Thursday, main attention of fundamental event traders will be on the ECB Rate Announcement at 12:45 GMT. The volatility on the EUR charts usually increases during the ECB Press Conference, which will start at 13:30 GMT.
Meanwhile, oil traders will most likely catch a one percent move at 15:30 GMT. The data release has been providing moves of more than one percent during the last month and a half.
XAU/USD short term forecast
On Wednesday morning, the yellow metal was trading between the 55-hour and the 200-hour simple moving averages at the 1,285.38 mark.
Most likely, the gold will be trading downside towards the bottom boundary of the pattern line at the 1,280.50 mark. Moreover, it is expected that the 200-hour simple moving average will retrace the gold to give an additional push to depreciate against the US Dollar.
On the other hand, the 100-hour simple moving average could support the yellow metal to break the resistance of the 200-hour simple moving average to trade near the 23.60% Fibonacci retracement level at 1,291.57.
Hourly Chart
A large scale review of the yellow metal's daily chart has been conducted. Zoom out the chart to see more details.In general we have identified three patterns, which represent three various large scale trends. Two of the patterns are junior to the dominant one and have guided the commodity price into the upper trend line of the largest pattern.
The commodity price is set to test and make one attempt after another to pass the upper trend line of the just mentioned pattern near the 1,300.00 mark.
From a fundamental large scale perspective, if the US Federal Reserve slows down their restrictive monetary policy, then the US Dollar would lose value. In that case gold prices will surge above the 1,300 level.
It could occur through a sudden jump caused by a Federal Funds Rate announcement or a press conference hosted by the central bankers.
Daily Chart
Traders short the yellow metal
For a week traders have been short on gold. Since Tuesday, traders were 57% short on the metal.
In the meantime, trader pending orders in the 1000-base point range were set to sell. Namely, 57% of orders were set to sell. Although, previously 70% of orders were set to sell.
In general, traders are still shorting the metal. They expect a larger decline to occur.
Although, there are no longer observable additional sell orders pending that would open additional short positions and push the metal's price lower.