Gold continues to defy resistance as it prints yet another high around $1986 today. The yellow metal is seen to be trading around $1974 levels as we prepare to publish and a break through $1940 would confirm a major top in place.
Gold probable wave counts are as follows: The yellow metal has produced a religious uptrend since May 2019 from $1262/65 lows (not seen completely). It has also comfortable cleared the previous high at $1920.
Believe it or not, the rise in Gold has been accompanied by two bearish divergences. The first has been the RSI and the second has been Silver, which is trading 50% lower than its high in 2011. These bearish divergences cannot be ignored.
Immediate support is seen towards $1940 levels as marked on the chart here. A break below $1940 might confirm that Gold has carved a meaningful top around $1986 today. It could be the first sign of a potential trend reversal.
Gold might have produced an ending diagonal pattern between $1907 through $1986 respectively. If the above proposed structure holds well, the yellow metal might be heading lower towards $1907 levels in the near future.
Traders might want to remain flat for now and wait for a break below $1940 support. Thereafter, Gold might be good to be sold on rallies with a protective stop above $1986.
Technical Analysis Team
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