Early in the American session, gold is trading around 2,034.59, above the 200 EMA, and below the 21 SMA. The metal is under strong bearish pressure but it is consolidating due to oversold levels and showing signs of exhaustion.

In case XAU/USD bounces above 2,029 in the coming hours and consolidates above this level, it could be seen as an opportunity to buy with targets at 2,038 and at the top of the downtrend channel around 2,050.

Since December 22, the eagle indicator since December 22 has been showing negative signals after having reached extremely overbought levels. The price is now approaching oversold levels. So, if gold trades above 2,030 in the coming days, we could expect the price to reach 5/8 Murray at 2,062.

If the bearish force prevails and if gold falls below 2,029 (200 EMA), it could generate a rapid decline as happened on January 8. In the H4 chart, we can see that gold bounced off the bottom of the downtrend channel around 2,016.64. Since then, we have seen a recovery, though another decline could occur.

If this scenario comes true, gold could reach the psychological level of $2,000. This move could also be benefited as an opportunity to buy.