Gold might have carved a meaningful top around $2075 levels over the past week. The metal has dropped lower and print $1862 before pulling back higher again. We need to see a break below $1862 levels to confirm a top in place.
Gold probable wave structure is as follows: The entire rally since $1262 lows in May 2019 was a part of the larger degree corrective Wave (B) (not seen on the displayed chart). Probability remains high for Wave (B) to have potentially terminated around $2075.
If the above structure holds well, Gold might have turned lower as larger degree Wave (C) from $2075 levels. Until now, the drop seems to be in 3 waves, hence corrective. Either a lower degree Wave 4 is unfolding or the metal might be preparing to push above $2075 mark.
In case of a lower degree Wave 4 unfolding, prices would drop below $1862 and complete the first impulse lower. Another possibility is that of an extended Wave 3 unfolding since $2050 levels. Either way, prices should continue dropping lower.
Also note that Gold had retraced towards the fibonacci 0.618 levels of the earlier drop between $2075 and $1862 respectively. If the above potential resistance holds, we should witness prices reversing lower from here while $2015 holds.
Traders might have initiated fresh short positions around $2000/10 levels earlier with protective stops above $2075 mark. The projected targets are pointing below $1862 for now.
Technical Analysis Team
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