Gold extended the advance from the bottom of 1,970 (200 EMA) and reached 2,007 (8/8 Murray). This recovery of more than 40 dollars in less than 24 hours shows that investors will continue to take refuge in gold in the next few days and the price could reach a new high of +2/8 Murray at 2,125.
On the 1-hour chart, gold has formed a falling wedge pattern. The last two candles that stand out above this pattern confirm a bullish movement for the next few hours.
Currently, it is trading at 2,005 above the 21 SMA and above the 8/8 Murray with a bullish bias, although we could expect a correction in the American session with the US inflation data (CPI).
Early in the Asian session, gold reached the area of the 200 EMA located at 1,970. Gold is rebounding from this level and the uptrend is likely to continue in the next few hours.
The eagle indicator has touched the 5-point level which signals an imminent technical bounce. Therefore, we could look to buy as long as gold remains trading above the 21 SMA located at 1,985.
The advance in the yields of the US treasury bonds is a negative factor for gold, making it difficult to sustain above the psychological level of 2,000. On the other hand, the negative tone in equity markets serves as support. Dow Jones futures lose 1.22% and Nasdaq futures are 1.48% down.
According to the descending wedge pattern, gold is expected to assert strength in the coming hours. Any correction towards 8/8 Murray located around $2,000 or towards the 21 SMA located at 1,985 will be an opportunity to continue buying with targets at 2,062 (+1/8) and 2,125 (+2/8).