Gold is trading around 3,985, rebounding after a strong technical correction of more than $100 in less than 24 hours from 4,050 to 3,947.
After the initial strong technical correction that occurred yesterday during the American session, gold is rebounding and is now consolidating below the psychological level of $4,000.
During the European session, gold attempted to consolidate above $4,000 but failed. We are now seeing a technical correction, so the bearish cycle is likely to resume. We could expect the instrument to reach +1/8 Murray around $3,906 in the coming days.
The Eagle indicator is showing a positive signal for the coming hours. Therefore, if the price consolidates above 3,950, any technical rebound will be seen as a buying opportunity, with targets at $4,000.
If the gold price consolidates above the 21 SMA, we could expect the metal to reach its all-time high. Gold could even reach +2/8 Murray around $4,062.
Given that gold is overbought on the daily chart, our outlook will remain bearish. Therefore, as long as the price trades below $4,050 or below $4,000, we could look for short-term sell targets around the 200 EMA at $3,739.
