Gold Might Have Carved A Meaningful Top Around $2075

10 August 2020

Gold had raised through $2075 mark over the last week before reversing lower again. Probabilities remain high for a bearish reversal from here. At the moment, it is difficult to predict and would be waiting for a break below immediate support trend line.

Gold probable larger degree wave counts are as follows: The yellow metal had completed an impulse wave at a larger degree around $1920 levels in 2011. Ideally, it should be followed by a corrective wave at a similar degree, before resuming its rally.

Corrective waves can be very complex at times and can take different forms. The most probable form right now could be an expanded flat structure A-B-C. Wave A could be seen as the drop between $1920 and $1046. Wave B has extended above $1920 and reached through $2075 levels.

In an expanded flat, Wave B always ends beyond the extreme point of Wave A, in this case $1920. If the above counts are correct, Gold should resume lower from here soon as Wave C. This could be a multi-year drop as Wave C progresses.

Immediate support is seen towards $1960, and a break lower would mark the beginning of a much deeper correction. A typical structure for Wave C is that it sub divides into 5 waves and might extend beyond Wave A termination, in this case $1046.

Traders might be inclined to initiate fresh short positions after an impulse drop is complete on a smaller timeframe.

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