Early in the European session, gold is trading around 2,497 within the downtrend channel formed since August 28 and testing the strong resistance at the psychological level of 2,500.

Gold is consolidating above the 21 SMA which suggests that a strong bullish move could occur in the coming days. If gold breaks sharply the area of 2,500, then it could reach 2,521 and finally, it could reach 2,539 (+1/8 Murray).

If the bearish force prevails, gold could drop below 2,495 and reach the 200 EMA located around 2,464 and could eventually reach 7/8 Murray around 2,460.

If gold consolidates above $2,500 in the next few hours, we will look for buying opportunities with targets at $2,512 and $2,539. The Eagle indicator is showing an oversold signal, so a technical bounce is likely to follow in the next few days.