Early in the American session, gold (XAU/USD) is trading at around 1,726, showing some weakness after hitting strong resistance at 1,726-1,730.

In the American session, gold reached 1,730, the highest level since August 30. The price remains close to that high, but it faces strong resistance which could prevent it from a further rise.

In the next few hours, gold is expected to pull back and may consolidate around 3/8 Murray located at 1,718. A technical bounce around this level could offer an opportunity to buy gold to resume its bullish cycle.

In case XAU/USD breaks the uptrend channel which has been underway since September 6, it could fall towards the 21 SMA located at 1,712. Additionally, a break below the 21 SMA could revive the main downtrend and gold could quickly drop to 2/8 Murray at 1,687.50

Next week, the US inflation data will be released, which will be the key to expectations about monetary policy. The next Fed meeting is scheduled for September 20-21, 2022. This data could offer strong volatility to gold and it could reach the resistance of 1,750 or fall towards the support of 1,687.

The area of 1,726-1,730 is the immediate resistance for XAU/USD. With a daily close above this level, the asset could rally and reach 200 EMA at 1,742 and even 4/8 Murray at 1,750. The bullish bias is expected to hold as long as the price remains above 1,712 (21 SMA). Below 1,710, an acceleration to the downside could occur and the price could drop to the lows of the last two weeks around 1,688 and 1,791.

As long as gold continues to trade below 4/8 Murray (1,750), the downtrend is expected to prevail. Therefore, any technical bounce into this zone will be seen as an opportunity to sell.

According to the 4-hour chart, gold maintains a positive outlook. As long as it remains above 1,712, it is expected to reach the resistance of 1,750 in the next few days. On the contrary, if it falls below 1,710, we should sell with targets at 1,687.