May 12, 2021
Gold might have carved a potential top around $1845 levels early this week, and could be preparing for a reversal. A break below the counter trend line support will confirm that the bearish reversal is on its way. Watch out for a break below $1770 levels going forward.
Gold rally between $1676 and $1847 seems to be corrective in nature, (3-3-5) labelled as A-B-C on the chart. Furthermore, it is almost testing the fibonacci 0.618 retracement which is seen around $1851 mark. The yellow metal could test and reverse lower again or drop from current price.
Gold has been dropping since $1960 levels until $1676 levels respectively. Also it has been retraced by a counter trend rally reaching $1845 recently. Ideally it should now turn lower towards $1600 levels until prices stay below $1875 resistance.
Immediate support comes in around $1770 levels as seen here. A break below that would confirm that bears are back in control and the trend has turned lower again. Please also note that a test of $1851/55 still remains possible before turning lower again.
Traders might position again towards the short side, with risk around $1875 levels, going forward. Only a sustained break above $1875 from here would change the above bearish structure.
Finacademy Technical Team
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