Gold (XAU/USD) in the American session is trading at 1,810, below the 5/8 Murray and below the 21 SMA. Yesterday, it reached the weekly pivot at around 1,836. The price was unable to consolidate gains above this level which ended the day falling back at the level of 1,812.
The strong pullback began in the American session yesterday, after the price had reached 1,836. The price seems to have found support above 1,806, which was reached early in the American session today. The metal is trading at 1,810 showing some recovery.
Gold is under downward pressure due to renewed demand for the safe-haven US dollar as investors worry about global economic growth and inflation on expectations of an interest rate hike by the Fed.
According to the 1-hour chart, we can see the 61.8% Fibonacci retracement, in the sequence from the low of 1,786 to the high of 1,836 located around 1,806.
Gold reached this level. As long as it trades above this zone, we could expect a recovery in the next few days and the price could reach the level of the 200 EMA at 1,838 and even 6/8 Murray at 1,875.
We can also see on the chart that gold has broken the downtrend channel that has been forming since May 4. Gold is currently consolidating above this channel. As long as it continues to trade above this area, there could be a recovery in gold in the coming days.
The 21 SMA located at 1,814 could encourage the recovery of gold in the short term. As long as the metal trades above this zone, we could expect a positive signal so that the price could reach 1,826 and 1,838.
A sharp break and close on daily charts above the dynamic resistance located at 1,838 (200 EMA) could accelerate the upside move and the price could reach 6/8 Murray at 1,875. This would represent the advance of the 261.8% Fibonacci level.
