Gold:

 

 

Technical Outlook:

Gold continues to trade in a tight range between $1700 and $1745 since last several trading sessions. The yellow metal is prone to further losses as long as prices stay below $1765 resistance. Only a break below $1660 would confirm with respect to price action, that Gold prices have reversed.

Structurally, the yellow metal has been in a corrective phase at a larger degree, and hence we continue to present the weekly chart setup here. After completing an impulse rally between $250 and $1920, Gold has been in a zigzag corrective phase.

The drop from $1920 through $1046 had sub divided into 5 waves, Wave (A) on the chart here. The subsequent rally has been in 3 waves and unfolded as a combination W-X-Y. It took 4 year for Wave (A) while 5 years for Wave (B) to potentially terminate around $1765.

If the above structure and wave counts are correct, Gold should proceed lower towards $1046 as Wave (C) unfolds. A zigzag corrective wave is also known as a 5-3-5 structure. To complete the structure, Gold needs to drop another 5 waves lower below $1046. This is the bigger picture for long term wave structure.

In the short term, Gold seems to have carved a leading diagonal from $1765 highs, potential lower degree Wave 1 (not labelled here). Wave 2 might be complete as a flat correction towards $1745 last week. High probability remains that Wave 3 is unfolding. If the above short term counts hold, Gold should sty below $1745 and push lower towards $1660 at least.

Once $1660 support is broken, it could be confirmed that the long term trend has turned bearish and Gold is good to be sold on rallies thereafter.

 

Trading Strategy:

Aggressively short against $1765, target is below $1046.

 

Legal Disclaimer: This article is not investment advice. The data provided is for marketing material purposes and is not intended to confuse nor guide our clients on trading decisions. Any investment activity performed is perceived to be a self-directed decision. Exclusive Markets is not liable for losses that may occur because of a decision made after reading the information published on our research page or any other media.

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