Gold has continued to decline on Wednesday. Although, the decline was paused by the 100-hour simple moving average.
In regards to the near term future, the commodity price was expected to get squeezed in between the 55 and 100-hour simple moving averages.
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 Tuesday, the XAU/USD exchange rate reversed south from the upper boundary of the long-term ascending channel at the 1,433.82 mark. During today's morning, the rate was testing the support level formed by the 100-hour SMA at 1,405.76.
If the given moving average holds, it is likely, that gold could make the U-turn and continue to appreciate against the US Dollar. In this case, the rate could re-test the given channel.
However, note, that the price for gold is pressured by the 55-hour SMA at 1,417.37. Thus, the rate could trade sideways between the given moving averages in the nearest future.
Hourly Chart
The last trend lines that could have stopped the surge of the metal have been broken. There is no technical resistance on the daily chart to the metal's price.
Due to that reason a chart with historical high levels is presented below. These levels are likely going to provide some resistance to the surge, if it continues.
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 bullish. 89% of orders were set to buy.