Gold Resistance Remains Intact At $2075 Handle

24 August 2020

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.

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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