Gold is trading around $4,162 within the downtrend channel that has formed since early September, consolidating above the 1/8 Murray level, which suggests it could continue to rise in the coming days. However, for that to happen, XAU will need to decisively break above the downtrend channel around $4,218.
Gold could continue to fall in the coming days, so we should be cautious, as it has reached the strong resistance at the 2/8 Murray level on three occasions. We have seen strong rejection in this zone, and it is likely that if the price remains below $4,170 in the coming days, it could continue to fall until it reaches the 0/8 Murray level around $4,060.
Conversely, a consolidation followed by a break above the downtrend channel and the 2/8 Murray level could signal a trend reversal, and we could expect the price to reach the 200 EMA around $4,253, and ultimately the 3/8 Murray level around $4,296.
On September 23, gold left a gap around $4,279. Technically, the price is expected to fill this gap in the coming days. Therefore, as long as the price remains below 4,218, there is a strong negative signal. Conversely, we could expect gold to rise in the coming days to reach the 4/8 Murray level around 4,375.