Early in the American session, gold is trading around the psychological level of $2,000, above the 21 SMA, and within the uptrend channel formed since November 10. Gold is showing signs of exhaustion. So, if it falls below the 8/8 Murray, we could expect a technical correction and the price could reach 1,986.
Yesterday, having reached the 2,007 level, the instrument retreated towards 1,995. The overall trend remains biased to the upside, but a technical correction could occur if gold loses the $2,000 barrier.
Since gold is showing signs of exhaustion, it is likely that as long as it is trading below $2,000, it could accelerate the downward move towards the 21 SMA at 1,987. Gold could even fall towards the bottom of the uptrend channel around 1,982.
On the other hand, if gold consolidates above $2,000, it is expected to continue to move higher and could reach the top of the uptrend channel around 2,015. Being overbought, if it reaches this area, it could be seen as a signal to sell.
Some fundamentals could weaken the strength of gold such as the lack of data to fuel market fears and the fact that Israel and Hamas are reaching an agreement. On the back of the growing appetite for risk, the metal could return to 1,937 or even fall towards the psychological level of 1,900.
The daily pivot point is around 1,995. As long as gold consolidates above this area, any pullback is expected to be seen as a buying opportunity. Below this level, gold could start the bearish cycle and then, it could reach the 200 EMA at 1,955.
