Early in the European session, gold is trading around 1,940.06, below the 200 EMA, and below the 21 SMA. The instrument is under strong bearish pressure. It is likely to continue its decline in the coming hours if it consolidates below 1,946.
The gold had a rapid fall towards 1,921 and in a few minutes, it returned to its previous level. This move could have made many traders lose if they were buying, so we should always set a stop loss when trading.
In the 1-minute chart, we can see that gold fell from 1,940 to 1,921, almost 20 dollars off its price. According to the next two 1-minute candlesticks, gold rebounded and reached 1,940. This strong move occurred without any fundamental basis. However, we can conclude that gold is losing liquidity which could lead to unexpected moves in the coming days.
In the next few hours, we expect gold to continue declining until it reaches 1,921. It could even reach 5/8 Murray around 1,906.
On the other hand, if gold trades below the 6/8 Murray located at 1,937, there is the possibility of a bearish acceleration and it could reach the bottom of the downtrend channel around 1,913.
On the other hand, if gold breaks the downtrend channel, consolidates above the 200 EMA, breaks the 21 SMA, and consolidates above 1,952, it could return towards 7/8 Murray at 1,968 and could even reach the psychological level of $2,000.
Therefore, any technical bounce in the next hours and as long as it trades within the downtrend channel and below the 200 EMA will be seen as an opportunity to sell in the coming days.
