Early in the American session, gold is trading around 2,045.84 within the uptrend channel formed since November 12 on the daily chart and below the secondary downtrend channel formed since December 19.
Yesterday, gold tested both channels after knowing the inflation data from the United States. Gold reached the high of 2,048 and then plummeted to reach the low of 2,016, hitting the bottom of the bullish channel which gave it a strong boost. Now it has returned to the levels of around 2,045. We expect gold to find a strong rejection below 2,048 in the next few hours which could be seen as an opportunity to sell.
On the contrary, if there is a sharp break of this secondary downtrend channel and if the price consolidates above 2,050, we could expect gold to reach 6/8 Murray at 2,062 and even 7/8 Murray at 2,093. Our outlook is based on the daily chart and it may take between one to two weeks for the metal to reach its goal.
If gold fails to break the downtrend channel and consolidates below the SMA of 21 located at 2,048, it would be seen as an opportunity to sell with the first target at 5/8 Murray at 2,031. The instrument could even reach the psychological level of 4/8 Murray located at $2,000.
