Gold hits major resistance at $1799 yesterday. Reversal ahead?

Technical Analysis:

Gold had raised through $1799 yesterday before reversing sharply towards $1770 before finding support again. The yellow metal is pulling back at the moment and seems to have carved a meaningful top already yesterday. If correct, $1786 might offer strong support.

Gold wave structure indicates that it has now terminated potential Wave 4 and is preparing to reverse lower towards $1625 as Wave 5 unfolds. Also note that the yellow metal has tested fibonacci 0.618 retracement of Wave 3 as labelled on the chart here.

Earlier, Gold had carved Waves 1, 2 and 3 around $1802, $1875 and $1676 levels respectively. Since then, a corrective flat pattern seems to have unfolded, labelled as Wave A-B-C. The pattern looks complete at $1799 or might test $1800 handle.

If the above structure is correct, Gold might turn lower from here and continue to remain under the control of bears through $1625 levels. Immediate price support is seen just below $1760 and a break lower would accelerate the drop.

Alternately, if bulls manage to push through $1799 highs, Gold might test $1807/10 levels before finding resistance again. Either way, a bearish reversal seems to be imminent from current levels or from $1807 levels respectively.

Only a sustained break above $1875 would change the above bearish structure. Watch out for intraday resistance today around $1785/86 levels and a potential bearish reversal from there.

Prepared by

Finacademy Technical Team