Gold is trading below the 3/8 Murray and above the 21 SMA. During the American session, gold bounced after reaching the low of 1,823 and rose sharply to reach the high of 1,846. Currently, there is a technical correction, and it is likely that the decline will continue and the price will consolidate around 1,836-1,830.
Treasury bond yields are falling. The 10-year bond yields hit 3.10%, the lowest level in two weeks. This occurs in the face of greater demand for safe-haven assets as a result of the fall in the equity market. If the market sentiment continues, this data could favor the recovery of gold in the coming days.
According to the 4-hour chart, we can see that gold has been forming a head-and-shoulders pattern since the beginning of June. This pattern is yet to be confirmed. Only a daily close above the 200 EMA located at 1,851 could confirm the bullish move. In case this scenario occurs, XAU/USD could reach 4/8 Murray at 1,875 and could even reach the psychological level of 1,900.
A bearish channel has formed since June 6, where gold has been trading between highs and lows. During the European and American sessions, gold broke through this channel and is now consolidating above it. If in the next few hours gold manages to consolidate above this downtrend channel, it could be a positive sign of recovery and we could expect it to continue rising to the area of 1,875.
Conversely, if gold returns below the low of 1,823, we could expect the downtrend to resume and invalidate any other signals or patterns. Then, gold could drop to 2/8 Murray at 1,812 and could even hit the low of May 16 at 1,786.
The eagle indicator is giving a positive signal since June 14. It is likely that if XAU/USD consolidates above the 21 SMA (1,836), it could continue its uptrend and break the barrier of 4/8 Murray.