Gold is trading at $3,947 with strong upward momentum after consolidating above $3,900 during Monday's European session.

This strong recovery in gold could take it up to the 21-day simple moving average (SMA), around $3,974; it could even encounter strong resistance near the upper band of the downtrend channel, at $3,990.

Since gold is now rising during the US session, we could continue buying at current price levels, around $3,947, with targets at $3,974 and $3,990.

A decisive break above the downtrend channel and consolidation above the psychological $4,000 level could be a positive signal for gold, and we could expect it to reach the Murray 2/8 level, around $4,062; ultimately, we expect it to reach the Murray 3/8 level, around $4,218.

Conversely, the bearish outlook continues to prevail, as a gap pattern has formed around $3,873 on gold's H4 chart. Gold is likely to return to this price level, so this presents an opportunity to open short positions around $3,974 and $3,990, with targets at $3,825 and perhaps even lower, once the gap is closed.

The Eagle indicator is showing a positive signal, so any pullback in gold will be viewed as a buying opportunity in the coming hours until it encounters strong resistance levels.