Gold hourly chart has been presented here to have a look at the short term wave counts and find an impulse boundary that confirm bearish reversal. The yellow metal is set to face resistance around $1780/90 levels as highlighted by fibonacci extensions here.
Until now, Gold is clearly trading into the buy zone of the support rend lines. The immediate support trend line passes through June 05 low at $1678 and June 18 low at $1717 respectively. Last week, the yellow metal had bounced off the trend line support at $1747 keeping the bullish structure intact.
Gold is seen to be trading around $1772 as we prepare this article, and could be inclined to push higher towards $1790 levels, before finding resistance again. Please note the above level is fibonacci 0.618 extension of recent rally between $1678 and $1744 respectively.
Alternately, if prices do not break above $1780 from here and continue dropping lower towards $1747 lows, it would confirm that a meaningful top is in place at $1780 and that the yellow metal is expected to remain in control of bears going forward.
Furthermore, a break below $1747 would not only be seen as constructive for bears but also break below the trend line support, entering into the sell zone. We shall be looking for price action to break below $1747 and continue to break initial support at $1717.
If the above unfolds as expected, Gold would be confirm the first step towards a major trend reversal. We would be looking to sell on rallies towards the backside of support trend line, thereafter. Overall, Gold has less room for rallying from current price ($1772).
Traders might be waiting for prices to break below the trend line support and enter into the sell zone before initiating fresh short positions against $1780/90 levels.
Technical Analysis Team
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