Early in the American session, Gold is trading around 2,913, above the 21 SMA, and above the 200 EMA which suggests that the instrument could extend its rise in the next few hours and reach 2,922 (R_2). Gold could even reach the strong resistance zone located around 2,939.
The positive outlook is valid for gold, as we see a strong technical rebound after reaching the key support of $2,880. The first resistance is located at $2,922 - $2,935, both levels could serve as a key point for bears and could be seen as a signal to sell below these areas.
On the contrary, in case gold consolidates below 21 SMA (2,905), it is expected to quickly reach 3/8 Murray located at 2,890. The metal could even approach the 200 EMA located at 2,887, an important key support level.
Market volatility will remain high over the next few days as a strong technical correction will occur above the psychological level of 2,900. Therefore, we must be alert to this level if the price reaches resistance levels or makes new highs.
