Early in the American session, gold (XAU/USD) is trading around 1,955.77, below the 21 SMA and the 200 EMA. We expect that in the next few hours, gold will continue with the technical correction. It could reach the level of 1,948 and even 7/8 Murray located at 1,937.
During the European session, gold left a gap around 1,960. In the next few hours, the price is expected to move towards this level and then it could resume its bearish cycle. In case gold trades below 1,961, we could expect it to continue lower, with targets at 7/8 Murray located at 1,937.
In the event that gold breaks and consolidates above 1,962 (21 SMA), a bullish movement could occur up to 1,971 and the high of June 1 around 1,982.
This week, markets will be waiting for the decision of the Fed. Investors believe that the US central bank may increase its interest rate. Until then, gold is likely to consolidate around 1,972 to 1,945.
Another fundamental data that could generate strong volatility is the inflation data that will be published on Tuesday. If this announcement is positive for the United States, we could see a strong bullish movement in gold, but if the data comes out negative, we could expect a sharp drop in gold that could even reach the psychological level of 1,900.
In the next few hours, we can expect gold to trade below 1,961, which will be seen as a signal to sell. The eagle indicator is giving a negative signal and gold is likely to continue its fall for the next few hours.