Early in the American session, Gold (XAU/USD) is trading around 1,994.63, around the 200 EMA, and below the 21 SMA located at 2,019. Gold is oversold and is trading below the psychological level of $2,000.
Since gold reached its all-time high, it has continued to move sharply lower and is now expected to continue its decline if it falls and consolidates below 1,990.
Gold could bounce if it consolidates above 1,993. Then, we could expect it to reach the 23.6% Fibonacci retracement around 2,025. If it exceeds this level, it could reach the 38.2% Fibonacci level located at 2,062.50.
The eagle indicator is giving an extremely oversold signal, So, we foresee a technical rebound in the next few days only if the XAU consolidates above the psychological level of $2,000 or above 1,992 (200 EMA).
The market sentiment report shows that there are 59.81% of traders who are buying gold. According to our contrarian strategy, it is expected that gold could continue falling. Last week, we saw a 16.49% increase in buying positions.
Gold is likely to trade lower in the coming days, but the metal is expected to make a technical correction towards the psychological level of $ 2,000 or the 21 SMA. Then, the price could resume its downward cycle.
The key for the next hours will be to watch the 1,990 level. In case gold consolidates above this area, we may have the opportunity to buy. On the other hand, if gold trades below this zone, it is likely to continue its fall and reach the weekly support at 1,965.