Early in the European session, Gold was trading around 2,062.50 that is below the 21 SMA located at 2,070.59 and below the daily pivot point located at 2,072.
On the H4 chart, we can see that gold is inside an uptrend channel formed on Dec. 14. Currently, it is trading within the bullish channel and the outlook remains positive.
It has been testing the bottom of the trend channel in the last few hours. In case there is a sharp break below 2,060, we could expect a bearish acceleration and the price could reach the 200 EMA located at 2,020.
If in the next hours, gold consolidates above 2,072, we could consider this a signal for a recovery and the price could reach 2,090 and even 6/8 Murray at 2,125.
According to the technical chart, gold has upside potential but since December 26th, it has been trading within a secondary bearish channel as part of a technical correction.
We could see a break of this channel as a recovery for gold. However, if it continues to trade within the bearish channel, we could expect a drop towards 4/8 Murray which represents the psychological level of $2,000.
In the coming hours, gold could continue to move higher and a consolidation could occur in the range between 2,062 and 2,088. This level could be seen as a buying and selling opportunity.