Gold Might Pullback Towards $1950/90

28 September 2020

Gold has confirmed that bears are in control and the long term trend might have turned lower after prices broke below $1862 lows over the last week. The yellow metal trades close to $1860 levels for now and might be preparing for a counter trend rally soon.

Gold short term wave structure since $2075 highs is as follows: The drop from $2075 towards $2015 could be marked as lower degree Wave 1. The subsequent rally towards $2050 as Wave 2 and the drop thereafter towards $1862 as Wave 3 respectively.

Gold remained sideways for an extended period after printing $1862 lows, and managed to produce a contracting triangle. The triangle terminated around $1975 levels, which could be potential Wave 4 as labelled on the chart here.

Finally, Wave 5 might have terminated around $1848 levels completing the impulse drop from $2075 mark. If the above structure holds well, we could witness a strong corrective wave towards $1950/90 levels under ideal conditions.

Also note that Wave 4 termination was seen towards $1975 and fibonacci 0.618 retracement is seen through $1990 levels respectively. High probability remains for a bearish resumption, if prices manage to reach there in the next few trading sessions.

Traders might be prepared to initiate fresh short positions around $1950/90 zone, with protective stop above $2075 and projected target below $1670 levels.

Prepared by
Technical Analysis Team

Disclaimer: This information has been produced by a third party, for general information purposes only, and is not indicative of future results. Abans Global takes no responsibility for its accuracy or completeness. Any opinions expressed do not reflect those of Abans Global. This information does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should seek independent advice before making investment decisions. Reproduction of this information, in whole or in part, is not permitted. Please note: If you are a Professional client, you are not eligible for negative balance protection and you could lose more than your initial deposit.

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