Early in the European session, Gold (XAU/USD) is trading around 1,988.68 below the 21 SMA and below the 200 EMA. On the chart, we can see a consolidation of gold between a high of 2,009 and a low of 1,974 which has been oscillating for the past few days.

Yesterday the price of gold fell sharply after the release of US GDP data for the first quarter. XAU/USD reached the level of $2,003 and then lost almost $30, falling to the $1,974 area.

In the chart above, we can see the formation of a falling wedge. A break below 1,986 could accelerate the fall of the precious metal towards the 1,974 level. This area of 1,972-1,974 has been strong support and has acted as a bottom for XAU/USD on previous occasions. If gold falls below this level, it could reach 7/8 Murray located at 1,968.

Conversely, in case of a sharp break above 1,994, this could be seen as a positive sign for gold and the instrument could reach the psychological level of 2,000 and also reach the strong resistance of 2,009.

The eagle indicator is giving a negative signal. It is likely that a fall below 1,986, where the daily pivot point is located, might cause a further depreciation of gold and the price could fall in the coming days.