FX.co ★ Trading Signal for GOLD (XAU/USD) on December 08-09, 2022: buy above $1,775-1,781 (+1/8 Murray - uptrend channel)

XAU/USD is trading around 1,782, above the 21 SMA showing a bullish bias. It is likely that if gold consolidates above this area, it could reach the zone of 1,803 and even reach +2/8 Murray located in 1,812.

Investors are worried as Vladimir Putin said the threat of nuclear war is growing, suggesting they would use nuclear weapons in response to an attack on his country. This news could increase risk aversion and investors could take refuge in gold. hence, the price could reach levels of 1,850, even quickly climbing as high as the landmark level of 1,900.

Risk aversion could increase, causing investors to be very cautious. This is due to negative data from China, raising concerns about a global recession. This assures investors to take refuge in gold and the price could increase only if it consolidates above the psychological level of 1,800 -1,812.

Yesterday in the American session, gold quickly rose above the uptrend channel, breaking the 21 SMA (1,780) and reaching the swing high of 1,788.06.

The asset is currently consolidating above the key level of 1,781 (21 SMA), suggesting that if it settles above this area, the price could resume the bullish cycle in the next few hours.

In the next few hours, we expect XAU/USD to trade above 1,781 and reach the resistance of 1,803 and even the high of Dec 5 at 1,810. On the other hand, in case of a technical bounce around the uptrend channel formed since November 22, we will have an opportunity to buy around 1,775.

A close on the 4-hour chart below 1,770 and a sharp break of the uptrend channel are critical to trigger further declines in gold. The metal could quickly reach the 8/8 Murray (1,750) and even the 200 EMA located at 1,736.

Our trading plan for the next few hours is to buy gold above 1,781 or in case of a technical bounce around 1,775, with targets at 1,803 and 1,812.