Early in the American session, gold is trading around 1904.40, above the psychological level of $1,900 and below the 21 SMA located at 1,907.
Since July 25, gold has been under strong downward pressure. It is expected to continue its decline in the next few days and it could reach the 1,875 zone, a level that coincides with the key support of 0/8 Murray.
In case the XAU/USD pair breaks above 1,906 and consolidates above this level, we could expect an acceleration to the upside and the instrument could reach 3/8 Murray at 1,921 and could even reach 4/8 Murray and the EMA 200 located at 1,937.
On the 4-hour chart, we can see the formation of a symmetrical triangle pattern. It means that gold is expected to consolidate around this pattern in the coming hours. In case of a sharp break on either side, it could determine the trend for the next few days.
Meanwhile, the daily pivot point is located at 1,903 which adds bullish strength and is supported by the key level of 1,900. A recovery is likely to occur in the next few hours only if the price consolidates above this level.
Additionally, the weekly pivot point is located at 1,923 and 3/8 Murray is located right there. Both have become a strong barrier to gold. In case it reaches this level in the netx few days and fails to break it, it will be seen as a signal to sell below.
Since August 10, the eagle indicator has been giving a positive signal. However, the bearish pressure keeps gold under consolidation. In case there is a break above 1,906, we could expect gold to recover and reach 1,923 and 1,937 levels.
