On Monday, the yellow metal's price was testing the resistance of the 1,410.00 level. Namely, by the middle of the day the resistance level had managed to stop another surge.
In general, it was expected that the 1,410.00 level would be passed as soon as hourly simple moving averages provide support and indicate that the metal has consolidated after the recent jump.
Federal Reserve released the FOMC Statement, where the US policymakers provided in-depth insights into the economic and financial conditions that influenced their vote on maintaining the Federal Funds Rate unchanged. Note, that FOMC Economic Projections were released at the same time.
The Fed suggested that it would cut the interest rate in 2020. The median target for the federal funds rate remains 2.4% for 2019. Note, that the Federal Reserve has not cut the rate since the financial crisis. However, recent employment data set and inflation data releases have led analysts to forecast cut rates in the future.
Economic Calendar Analysis
The data that is noted by the financial markets as important starts on Wednesday. On that day, the US Durable Goods Orders and Core Durable Goods Orders will be published at 12:30 GMT.
On Thursday, the US Final GDP will be published at 12:30 GMT. This is the least important GDP of the three quarterly publications of the US GDP.
The full review of all of the notable events is available in video on the Dukascopy Webinars YouTube channel.
XAU/USD short-term forecast
On Monday morning, gold was again testing the resistance of the 1,410.00 level.
The metal's price was expected to pass this level, as soon as the 55-hour simple moving average approaches and pushes it higher.
On the other hand, note that the metal is massively overbought due to fundamental causes. It might retrace back down, if the fundamental environment becomes more favourable to risks.
Hourly Chart
The fundamental surges are being paused by large scale patterns on the daily candle chart. By the middle of Friday, the last large scale pattern was broken and the middle of July technical target has already been passed.
If the surge continues, a daily candle chart with historical high levels will be presented, as historical highs are most likely going to provide resistance to the surge.
Daily Chart
Short position volume remains unchanged
Since Friday, traders continued to be short on gold. On the Swiss Foreign Exchange 54% of open gold position volume was in short positions.
Meanwhile, in the 1000 base point range around the current metal's price the orders were no longer bearish. 63% of orders were set to buy.
Stop losses of short positions and buy to open long orders had become dominant from Thursday to Friday.