Gold has managed to print yet another high at $1818 over the last week. The yellow metal has been carving a series of higher highs and higher lows since May 2019 lows at $1260/62 levels. It cannot be confirmed as of now, but a break below $1750/60 support is required to confirm a top.
The wave structure presented over the hourly chart is indicating a religious up trend. Gold has been trading clearly into the buy zone of both trend lines. A break into the sell zone and further below $1760 would be the first step towards potential reversal.
Let us take a moment to discuss the larger degree wave structure (not seen here). Gold has been in a multi-year corrective drop since $1920 highs in 2011. The drop between $1920 and $1046 (December 2015 lows), was in 5 waves hence an impulse.
A 5 wave drop within a corrective phase indicates that the drop is incomplete. This confirms, that Gold need to print below $1046, to complete the zigzag corrective drop that had begun since $1920 levels in 2011.
Going further, the rally from $1046 through $1818 has been corrective, A-B-C and might be approaching a termination soon. The entire rally could be the second wave, within the corrective phase described above.
If the above structure is correct, Gold prices should stay below 1920 mark and resume lower towards $1046, over the next several months. It might seem unusual to many traders as they remain over optimistic on Gold prices pushing towards $2000 mark.
Watch out for a break below $1760 to confirm that a meaningful top might be in place around $1818 mark.
Technical Analysis Team
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