After reaching its all-time high of around $4,528, gold underwent a sharp technical correction to $4,450. From that level, XAU has formed a downtrend channel on the H1 chart, which could indicate that the instrument may find it difficult to continue rising in the coming hours.

If gold consolidates below the 21 SMA located at $4,488, as shown on the H1 chart, we could expect a decline, and it could reach the bottom of the downtrend channel around 4,420 or even reach the 200 EMA around 4,376.

At the beginning of the week, gold left a gap at about $4,339, which is likely to be covered in the coming days, so there is downside potential and an opportunity to take short positions below $4,490.

If gold consolidates above $4,495, we could expect it to reach +1/8 Murray around $4,531. This level could be seen as a signal to open short positions. In turn, the odds are for a double top formation, which would confirm the technical correction.