Gold might be heading higher towards $1858 mark soon

Written by

August 4, 2021

Technical Analysis:

Gold might have carved a potential support around $1805 levels as bulls are looking poised to extend rally towards $1858 in the coming weeks. Gold needs to ideally stay above $1789 levels to keep the above bullish structure intact for now.

Gold had dropped from $1916 through $1751 sub dividing into 5 waves labelled I through v on the chart here. Further, the termination around $1751 could be larger degree Wave A within the A-B-C decline expected toward $1650 levels, going forward.

Since $1751 lows, Gold might be carving a corrective Wave B, which might extend its reach towards $1858 before terminating. Also note that $1858 is fibonacci 0.618 retracement of the earlier drop between $1916 and $1751.

Furthermore, Gold seems to have carved lower degree waves a and b around $1834 and $1789 levels respectively. If the above is correct, bulls might be inclined to produce wave c rally towards $1858 high to terminate the corrective rally and larger degree Wave B.

Gold is most likely to find strong resistance around $1858 before resuming lower again. Most traders might position on the long side for now with potential risk just below $1789 levels.

Prepared by

Finacademy Technical Team

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