Gold Holds Below $2075 Resistance

07 September 2020

Gold is holding below its potential top and resistance around $2075 levels since last several trading sessions. The yellow metal has been drifting sideways in a potential contracting triangle and could drift either direction. A break below $1862 would confirm a meaningful top in place.

Gold potential wave counts are as follows: Gold might be carving an expanded flat corrective wave at a larger degree since $1920 highs in 2011. Prices tend to go beyond extremes in case of an expanded flat and Gold has also rallied past $1920 n the recent weeks.

The earlier drop between $1920 and $1046 could be marked as a larger degree Wave (A) within the proposed expanded flat correction. The subsequent rally towards $2075 might have unfolded as Wave (B) within the expanded flat.

If the above structure is correct, Gold might be preparing to reverse lower towards $1046 as Wave (C) unfolds in the next several weeks. A break below $1862 interim lows would confirm that trend has reversed lower and bears are in control.

Alternately, if Gold is consolidating within a triangle preceding the last rally, it could break higher above $2075 resistance before carving a top and reversing sharply lower again. Probabilities for another push through $2075 remains less for now.

Traders might be preparing to hold on the short positions initiated earlier and also look to sell on rallies towards $1950/2000, going forward. Protective stops remain above $2075 and potential targets point below $1450 respectively.

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