Gold has been probing resistance around $1790 since yesterday. The yellow metal is trading around $1785 levels as we prepare to publish this article, and bears might be inclined to break below $1750 interim support, going forward.
Alternately, a break above $1790 would open door toward $1800 levels, before Gold finds resistance again. Having said that, it is also more or less clear that upside remains limited for the metal and we can expect a bearish reversal anytime soon.
We continue to bring up the weekly chart to keep the bigger picture in mind. Gold has been in a corrective phase since $1920 highs in 2011. The previous rally from $250 levels was an impulse wave, which terminated around $1920.
An impulse wave is usually followed by a corrective wave, which normally unfolds into 3 waves but in the opposite direction. The drop between $1920 and $1046 could be considered as the first Wave (A), within the (A)-(B)-(C) corrective phase.
Also note that Wave (A) had sub-divided into 5 waves and hence the structure is that of a zigzag, which unfolds as a 5-3-5. The rally from $1046 has been in 3 waves and might have terminated around $1790 levels already. If not, it is expected to complete soon around $1798 levels.
If the above larger degree counts hold, Gold is very close to resuming Wave (C) lower towards $1046, going further. A break below $1750/20 would confirm the first step towards a meaningful reversal.
Aggressive traders short against $1795. Conservative traders remain flat for now.
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