Gold faces resistance around $1800/05 zone

Technical Analysis:

Gold might have carved a meaningful top around $1916 levels on June 01, 2021. Since then, the yellow metal has managed to carve a series of lower lows and lower highs hitting $1750 mark yesterday. If the trend has turned lower, Gold shall remain below $1916, going forward.

Looking at the wave counts, it seems that Gold has carved Waves 1 and 2 around $1856 and $1903 levels respectively. Since then, Wave 3 seems to be unfolding and lower degree waves I, ii and iii might have already terminated.

Furthermore, Gold might have also terminated lower degree wave iv around $1798 levels recently. Alternately, wave iv might be still unfolding as an expanded flat and could reach up to $1800/05 levels before terminating.

If the above proposed structure holds well, Gold might be soon terminating Wave 3 around $1700/10 levels, going forward. Also, the yellow metal could reach $1650 mark by the time the impulse wave is complete. (5 waves down from $1916.)

Gold bears might be already preparing to take out the next support around $1720, followed by $1678 in the near future. Traders might want to continue selling on rallies until prices stay below $1900 levels, going forward.

Prepared by

Finacademy Technical Team