Gold is trading around 3,388 under a slight technical correction. During the opening session on Wednesday, gold reached the 3,393 level. From then on, a technical correction is likely to occur from that point, as we observe overbought and exhaustion levels.
Technically, gold could reach the 6/8 Murray level around 3,398. However, this zone represents strong resistance for gold, and we could expect a strong technical correction from this level to reach the 4/8 Murray level around 3,359.
The Eagle indicator is showing signs of an overbought market. Therefore, if gold attempts to reach the psychological level of 3,400 and fails to consolidate above this zone, it will be seen as an opportunity to sell, with medium-term targets around 3,320.
Last week, gold strengthened due to comments from the Federal Reserve chairman, which boosted demand for the safe-haven asset. However, the market is likely to return to these price levels.
Gold could undergo a technical correction as overbought levels are observed. Hence, the odds are that the gold price will reach 3,281 in the coming days.
Therefore, short positions are only considered if the gold price consolidates below $3,400, with targets at $3,378, $3,359, $3,339, $3,320, and around the psychological level of $3,300.
