Early in the European session, Gold (XAU/USD) is trading around 1,873.25. We can see a strong consolidation below the resistance of 1,880. Gold is likely to continue trading within a range until inflation data is released on Thursday in the American session.
In case gold continues to rise, it should consolidate above 1,880 and then it could reach the zone of strong resistance around the psychological level of 1900. It could even reach +1/8 Murray located at 1,906.
On the other hand, in case gold consolidates below 8/8 Murray in the next few hours and falls below 1,875, we expect a decline towards the support of the 21 SMA located at 1,863.
This level where the 21-day moving average is located could give gold a good technical bounce to resume its bullish cycle and the instrument could reach the area of 1,906 (+1/8 Murray).
Conversely, in case negative pressure prevails, a strong bearish acceleration is expected to occur below 1,860. Then, the metal could reach 7/8 Murray at 1,843 and even the bottom of the uptrend channel around 1,830.
Our trading plan for the next few hours is to wait for the XAU/USD pair to define the trend. In the event that it trades below 1,875, it will be a clear signal to sell, with targets at 1,860 and 1,843. On the contrary, in case the instrument breaks sharply the resistance of 1,880, it will be a signal to buy with targets at 1,906
Relevance up to 05:00 2023-01-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
