Early in the American session, gold is trading around 3,174.33, retreating after reaching the top of the downtrend channel.

Yesterday, gold fell to a low of 3,120 and recovered more than $130 in less than 24 hours, reaching 3,251.

Gold is expected to continue to rebound in the coming hours and could reach 3,211, a level where a breakout of the downtrend channel is expected.

If gold fails to break and consolidate above 3,226 (200 EMA), the outlook could be negative, and the bearish cycle is expected to resume, potentially reaching 3,125 and even the bottom of the downtrend channel around 3,070.

If bullish strength prevails, gold is expected to break above 3,226, then reach the 6/8 Murray level at 3,303, and could even cover the gap it left on May 8 around 3,335.

The Eagle indicator is reaching oversold levels. So, we believe that any pullback, as long as the gold price remains above the 4/8 Murray level, will be seen as an opportunity to buy gold.