Gold is trading around 1,954.93 below the 21 SMA and above the 7/8 Murray. In the daily chart, we can see that gold is trading within a downtrend channel formed since May 18.
On June 15, XAU/USD reached its lowest level in three months below 1,930, but rebounded strongly, giving it an opportunity for a weekly close above 1,937, which means an equilibrium level.
This recovery of gold above 1,924 means that in the next few days, it could continue to rise and the metal could reach the psychological level of $2,000.
The 21 SMA is located around 1,957 which has become strong resistance. I gold consolidates above 1,970, we could expect the bullish cycle to resume and the price could reach the $2,000 area again and could even reach 2,062.
However, the technical picture does not favor bullish momentum because the Eagle indicator is approaching extremely oversold levels on the daily chart. Therefore, in the next few days, we expect a consolidation below 1,968 as resistance and around 1,925 as support.
In case XAU/USD falls below 1,937 and closes below this area on the daily chart, a strong bearish move could occur and the price could reach the low of June 11 around 1,924 and even could reach the zone of the 200 EMA located around 1,877.
Conversely, in the event that gold consolidates above 1,970, we could expect the bullish movement to resume and it could reach 38.2% Fibonacci around 1,983 and even reach the Fibonacci 61.8% around 2,023.
