Early in the American session, gold (XAU/USD) is trading below the 21 SMA located at 1,806 and around the 61.8% Fibonacci. If gold fails to consolidate above 1,795 in the next few hours, it is likely to continue its decline to reach the Fibonacci 161.8% at around 1,765.

Gold tried to break the 2/8 Murray resistance at around 1,812 but failed. The price is now consolidating below this level. The bearish pressure is likely to accelerate and we could see a decline in the price of gold.

The lingering rumors surrounding the Federal Reserve about raising rates to curb high inflation turned out to be a key factor that continued to put pressure on Gold. That's why investors prefer to take refuge in the US Dollar.

US Treasury bond yields are rising due to further aggressive tightening by the Fed. This outlook brought the dollar (USDX) back close to its 2002 highs and put additional pressure on gold.

The minutes of the latest FOMC monetary policy meeting will be released on Wednesday and the US monthly NFP employment report on Friday. Strong market volatility is expected and gold is likely to trade in the range of 1,781 to 1,820.

According to the 4-hour chart, gold is likely to continue its downward move in the coming hours. Below 1,806, gold is expected to be under strong downward pressure.

On the contrary, in case gold resumes its upward movement, it is expected to consolidate above 1,806 and the price could reach the top of the downtrend channel at around 1,818.

A pullback to the top of the downtrend channel will be a clear signal to sell gold with targets at 1,765, the 161.8% Fibonacci expansion zone.

Additionally, if gold reaches these support levels and consolidates above the 161.8% Fibonacci, it will be a signal to buy in case there is a technical bounce. The price is likely to retreat and reach 1,781 and 1,806.