Gold is trading around $4,074, rebounding after decisively breaking out of the downtrend channel, and is currently above the 2/8 Murray line and above the 21 SMA.

If gold consolidates above the 2/8 Murray line and above the broken downtrend channel in the coming hours, this could be seen as a positive signal to buy, with targets at the 200 EMA around $4,128.

A decisive break above the 200 EMA could change the outlook for gold, and we could expect it to continue rising in the coming days. The first target could be $4,218 or even the psychological level of $4,500.

Conversely, if gold falls below the 21 SMA and below the 2/8 Murray level, we expect the downtrend to resume. If this scenario occurs, we could expect it to reach the lower band of the downtrend channel around $3,930 and ultimately the 1/8 Murray level around $3,906.

The Eagle indicator is reaching overbought levels, so even if gold reaches the July 21 high around $4,165, this could be seen as a sell signal.