On Thursday, the XAU/USD exchange rate reversed south from the upper boundary of the medium-term descending channel at 1,497.30. During today’s morning, the rate was testing the support formed by the 55- and 100-hour SMAs at 1,489.29.
From a theoretical point of view, some downside potential could prevail in the market, as the price for gold should target the lower channel line. It is likely that the commodity price could decline to the psychological level at 1,480.00.
However, if the given moving averages hold, it is likely that yellow metal could consolidate against the US Dollar within the following trading session. Also, it is unlikely that a breakout north could occur, as the rate is pressured by the 200-hour SMA at 1,494.10.