Gold is retracing to $1780-90 zone before resuming its rally

Written by

September 8, 2021

Technical Analysis:

Gold has dropped below $1802, the lower degree triangle consolidation zone, and has found potential support around $1790. The yellow metal is also testing the backside of resistance turned support trend line as shown here and a bullish bounce is expected soon.

Gold has dropped from $1916 toward $1677 lows subdividing into five waves, marked as potential Wave A termination on the chart. If the impulse count is correct, the yellow metal is set to produce a corrective rally before resuming lower again.

Looking at the wave count between $1677 and $1834, it can be subdivided into five waves, carving an impulse. The corrective wave is still incomplete and needs to print another high above $1834. At the time of writing, the metal is correcting lower before resuming its rally above $1843.

The correction is expected to terminate around $1780, which is the fibonacci 0.382 retracement of the entire rally between $1677 and $1834 respectively. If correct, Gold bulls will be inclined to resume higher from $1780 and push above $1834 at least.

Alternatively, Gold can drop toward $1750 mark, which is fibonacci 50% of the above rally, before finding support again. Traders might position themselves on the long side accordingly.

Prepared by

Finacademy Technical Team

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