Gold faces resistance around $1880 levels

Written by

June 16, 2021

Technical Analysis:

Gold might be preparing to produce a counter trend rally towards $1880 in the near term, before finding resistance. The yellow metal is then expected to turn lower towards $1808 and $1750 levels respectively.

Gold had been able to carve a larger degree A-B-C since $1676 lows as labelled here. It seems to be a standard flat (3-3-5) wave structure, which has unfolded until now. Also note that $1916 potential top is also close to fibonacci 0.618 retracement of earlier drop between $2075 and $1676 levels respectively.

It the above structure is correct and holds well, Gold bears would be inclined to drag prices lower towards $1450 levels at least to complete a 3 wave corrective structure from $2075 highs. Gold might resume its uptrend thereafter.

Alternately, Gold might be unfolding an ending diagonal wave structure and continue much lower from current levels; potential remains below $1046 levels. We shall explore the alternate count again based on the price action around $1450 mark.

Either way, Gold is setting up to drop toward $1450 levels at least if not further. For the above bearish structure to remain intact, gold needs to stay below $1916 levels going forward. Most traders might be willing to remain short with a risk above $1925 mark.

Prepared by

Finacademy Technical Team

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