FX.co ★ Trading Signals for GOLD (XAU/USD) for November 20-21: buy above $1,968 (21 SMA - rebound)

Early in the American session, Gold (XAU/USD) is trading around 1,971.49, below the 21 SMA, and within the uptrend channel formed since November 10. In the H4 chart, we can see a strong technical correction meaning that the metal could be losing strength.

Gold is showing a strong technical correction after having reached the top of the uptrend channel around 1,993. If this channel is broken and the instrument consolidates below 1,968, we could expect a bearish acceleration and the price could fall towards the 200 EMA at 1,952.

Risk aversion will be the driving force for the gold price and the metal could resume its bullish cycle only if it consolidates above 1,975 (21 SMA). Then, it could reach the psychological level of $2,000.

Gold has a negative divergence with US Treasury bond yields. Given that in recent days we have seen a new rise in bonds and if the trend continues, gold could suffer losses and the price could reach 1,953 (200 EMA).

On the contrary, a correction in Treasury yields could favor the recovery of gold and it could reach 1,985 and 1,993.

The eagle indicator is giving a positive signal. So, any technical correction could offer the opportunity to buy gold only if it consolidates above 1,968.