Gold is trading around $5,183 with an upward bias and has been consolidating in this area since February 23, after gold reached $5,260.
The outlook remains positive for XAU/USD. However, we are observing the formation of a symmetrical triangle pattern, which is likely to break on either side of this pattern and could be seen as a signal to open bullish or bearish positions.
The Eagle indicator is showing a positive signal, so we expect gold to continue rising in the coming days until it reaches the +1/8 Murray located at $5,317. The price could even rebound to its all-time high of $5,600.
If XAU breaks below $5,150 (21 SMA), the outlook could be negative for gold, and it is expected to quickly drop to the psychological level of $5,000. Gold could eventually reach the 200 EMA around $4,933.
Given that gold continues to strengthen, our trading plan is to buy in the coming days, with targets at $5,312 and $5,600.
The Eagle indicator is approaching overbought levels, so we must be very careful if XAU/USD attempts to break above its weekly high of $5,260.
If this scenario occurs and the instrument fails to consolidate above this zone, we could see this as a pullback. Then, it could resume its bearish cycle and reach the psychological level of $5,000.
