Gold is trading around $4,675, the level at which it closed during the Easter holidays. Gold was showing positive signs, and we could expect it to continue rising next week until it reaches the upper band of the downtrend channel around $4,770, a level that could be seen as an opportunity to open short positions.
If gold falls below the 21 SMA at 4,652 and, in turn, decisively breaks the uptrend channel formed since March 20, we could expect the downtrend to continue, potentially reaching the 6/8 Murray level around $4,375.
Given that the XAU/USD pair has upside potential, despite technically overbought levels, we could look to the 200 EMA zone around $4,801 as a point to enter short positions. Below this zone, gold is likely to undergo a strong technical correction.
If the upward momentum prevails and gold consolidates above $4,800, we could expect it to easily reach the psychological level of $5,000 and could even reach the upper band of the uptrend channel around $4,120.
In the coming days, we should closely monitor the $4,650 level; above this level, any technical rebound will be seen as an opportunity to continue buying. Below this level, we should expect a decisive break of the downtrend channel, which will be seen as an opportunity to take short positions.