Early in the European session, Gold (XAU/USD) was trading at around 2,669 under a slight technical correction.

Last week, gold bounced from a low of 2,644 to reach a high of 2,710. Since the high of 2,710, gold has retraced towards the 61.8% Fibonacci. If the instrument consolidates in the next few hours above 2,662, we could expect the bullish cycle to resume.

Gold could reach 2,684 (200 EMA). A sharp break of the downtrend channel and consolidation above the 21 SMA could trigger a new bullish rally. So, gold could reach 6/8 Murray around 2,738.

On the other hand, if gold falls below 2,660, we could expect the bearish cycle to continue. The metal could reach 4/8 Murray at 2,656 and even form a double bottom pattern around 2,644.

The outlook for gold could be negative if it consolidates below 4/8 Murray in the next few days, which means the price could reach the psychological level of $2,500 in the short term.

On the contrary, a consolidation and a close above 2,686 could be positive for gold. Therefore, in the short term, it could reach 2,734 (6/8) and even 7/8 Murray around 2,773.