Gold needs to hold critical support at $1758 for next leg higher

Technical Analysis:

Gold prices declined sharply on Tuesday towards $1780-82, before bouncing back. The yellow metal is trading around $1794 mark at the time of writing and might resume higher. It needs to hold above critical support at $1758 to keep the bullish structure intact.

Gold prices are pointing towards $1890-1900 and up to $1920-28 zone going forward. The fibonacci extensions of Wave (a) are pointing towards $1890 and $1928 levels, which is not displayed on the chart here. Bulls are expected to be back in control until $1758 is intact.

Gold’s wave structure looks constructive with potential Waves (a) and (b) in place around $1834 and $1721 respectively. Further Wave (c) is in progress towards $1900 levels before giving in to bears again. The metal is expected to reverse lower toward $1450 thereafter.

With Wave (c), Gold prices might have carved lower degree waves I, ii, iii and potential iv around $1812, $1758, $1877 and $1782 as marked on the chart. Furthermore, the yellow metal is bouncing from fibonacci 0.786 retracement of wave iii around $1782 mark.

A bullish reversal remains high probability from here as traders remain poised to hold long positions against $1758 initial support.

Prepared by

Finacademy Technical Team