Gold is progressing higher toward $1835

Technical Analysis:

Gold is progressing toward $1835 at least as wave (c) unfolds in the next few weeks. The yellow metal needs to stay above $1721 intermediate support for the above bullish structure to remain intact. Intraday support for Gold is seen around $1745-50 levels.

Gold had rallied from $1677 through $1834 mark subdividing into five waves, carving an impulse wave. It is marked as potential wave (a) on the 4H chart here, within a corrective rally towards $1865 levels. The subsequent drop toward $1721 was in three waves, corrective zigzag.

The above correction has been marked as wave (b), which should be followed by a wave (c) rally exceeding $1835 mark. Please note that wave (c) rally could unfold as an impulse or an ending diagonal.

Since the rally between $1721 and $1800 looks like an impulse wave, probability of a five wave rally towards $1865 remains high. The yellow metal is correcting lower toward $1745-50 mark, as lower degree wave ii might be unfolding since $1800 mark.

Also note that $1745-50 is close to fibonacci 0.618 retracement of wave I, a common termination point for wave ii. Traders might be preparing to initiate fresh long positions around $1750 mark, with risk below $1720.

Prepared by

Finacademy Technical Team