Gold Needs To Break $1720/17 Support To Turn Bearish

26 June 2020

Gold has been in control of bulls since printing lows around the $1670 mark early this month. The rally has been marked as a-b-c, since it could be a part of a larger degree endian diagonal structure, which is not seen on the hourly chart.

Gold could extend its rally beyond $1780 interim resistance and reach $1798/1800 mark before finding resistance. Believe it or not, the yellow metal is close to forming a major top going forward or might have carved at $1780 already.

Immediate support is seen around $1717 mark while interim resistance is at $1780 respectively. With respect to price action, we need to see a break below the trend line support and $1717 to confirm a potential reversal ahead. Further, a continued drop towards $1670 support will confirm a long term bearish reversal ahead.

Also note that Gold has dropped from $1780 through $1754 in 3 waves until now. Since then, price action has remained sideways and we need another drop below $1754 to confirm a leading diagonal motive wave structure. That could be the beginning of a larger degree impulse drop, going forward.

The fibonacci extensions of the recent drop between $1780 and $1754 are pointing towards $1737 and $1712 respectively. If Gold drops accordingly, we might have our first major impulse wave to work upon. Thereafter, Gold could be seen as a sell on rallies candidate.

Gold has been in a corrective phase on a larger degree, not shown here. The yellow metal has been correcting lower since $1920 highs in 2011. A 3 wave corrective structure would drag prices below $1046, the December 2015 lows, to complete the correction. It is too early to predict at the moment, but Gold could soon produce a dramatic bearish reversal.

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