Gold ready to drop below $1676 from current price?

Technical Analysis:

Gold might have carved a lower top around $1798 levels on April 22, 2021. The yellow metal had then dropped through $1762 levels yesterday before staging a counter trend rally. A lower top might be in place at $1790 levels today. A drop below $1760 confirms a reversal is underway.
Gold wave structure since $1960 highs is as follows: The yellow metal has been able to carve Waves 1, 2, 3 and potential 4 around $1802, $1875, $1676 and $1798 levels respectively. If correct, the metal might be poised to resume lower from here soon.
Also note that the counter trend Wave 4 has unfolded as a combination w-x-y, a 3-3-3 structure. Furthermore, prices managed to reach up to fibonacci 0.618 retracement of Wave 3, which is close to $1804 levels.
If the above proposed wave structure holds well, Gold might be well on its way below $1675 and towards $1625 mark as Wave 5 begins to unfold. The counter trend line support is being back tested now around $1790 and prices are facing resistance.
The short term wave structure since $1798 is as follows: The drop between $1798 and $1762 had unfolded into 5 waves. It doesn’t look like an impulse, but can be categorized as a leading diagonal. The recent rally is just a counter trend, which should stay below $1798 mark.
Gold might be preparing its next bear leg very soon from around $1790/1800 levels. Immediate short term targets are pointing towards $1740 at least. The above will instil further confidence on the bearish setup.

Prepared by

Finacademy Technical Team