Gold prepares to take on $1812-30 zone near term

Technical Analysis:

Gold prices dropped through $1773 lows on Thursday before finding support again. The drop from $1793 was in-line with price action of a gartley. Bulls are now looking inclined to push through $1812 and $1830 level in the near term. Bottom line remains the $1762 interim low for now.

Gold lower degree wave structure since $1762-63 low is constructive for bulls. The rally between $1762 and $1793 can be clearly sub divided into five waves, a potential leading diagonal structure. As it should be, the subsequent drop was a corrective zigzag terminating around $1773 mark.

The above structure represents a classic Elliott Wave patter 5-3, at a lesser degree. If the above structure holds well, Gold prices should produce a sharp rally towards $1812 and $1830 in the near term. Also note that $1762 needs to hold for the above bullish scenario to remain valid.

The larger degree wave structure for Gold also remains constructive for bulls as it unfolds a corrective wave (a)-(b)-(c). Since $1721 low, Wave (c) seems to be unfolding and might have one more high to be print above $1877 mark, going forward.

Traders might be inclined to remain long from here ($1773-80), with risk around $1762 lows. Immediate short term resistance is seen at $1783 and a break there would confirm that bulls are back in control.

Prepared by

Finacademy Technical Team