Gold had witnessed one of those days after a long time, declining over (-4.5%) from $1965 highs. The yellow metal reversed sharply, giving in all gains since October 29, 2020 in a single trading session. Yesterday’s low was registered at $1850 and this scenario was discussed in the morning articles.
Gold is trading around $1870 mark for now and is expected to drift sideways for a while. If the metal produces yet another low below $1850, the decline from $1965 would be in 5 waves; making an impulse. That would confirm a meaningful top in place at $1965 levels.
Also any counter trend rallies should remain well capped below $1965, going forward. Once the impulse drop is complete, we can expect a bullish counter trend/corrective wave towards $1900/25 levels in the next few trading sessions.
Also note that fibonacci 0.618 retracement of the recent drop between $1965 and $1850 is seen passing through $1920 levels. High probability remains for a bearish reversal if Gold manages to reach there after completing the impulse.
Another remote alternate count is that of a double zigzag. In this case, Gold will not print another low below $1850 and continue rallying from current levels. The rally might possible extend towards $1980/90 levels going forward. The count is an alternate, hence less probable.
Finally, Gold continues to remain an excellent candidate to be sold on rallies from here, be it a retracement or a double zigzag. The yellow metal has seemingly carved a meaningful top around $2075 and should continue to stay below that mark in the next several months.
Short against $2075, target below $1670