Gold might be underway to complete its proposed counter trend rally towards $1950/60 and up to $1980 levels in the near term. The yellow metal trades through $1894 levels for now and a break above $1930 would be constructive for bulls. Counter trends into play now.
Gold had peaked around $2075 levels in August 2020. Since then the yellow metal has dropped through $1848 mark, sub dividing into 5 waves, potential impulse drop. As discussed earlier, an impulse wave is ideally followed by a corrective wave in the opposite direction.
The yellow metal might be into the last wave of a corrective rally and a break above $1930 would confirm. Also note that the fibonacci 0.618 retracement of the entire drop is seen towards $1980/90 zone. If prices manage to reach there, high probability remains for a bearish reversal ahead.
Looking at the larger degree wave structure on the weekly chart, Gold has been unfolding a potential expanded flat corrective wave since $1920 highs. Further the yellow metal has terminated Wave (A) around $1046 and Wave (B) around recent swing high at $2075 levels respectively.
If the above proposed structure holds well, Gold is setting up for a Wave (C) drop towards $1670, $1450 and beyond. It is too early to predict the bearish reversal at the moment but the impulse drop has raised possibilities of the same.
Gold remains good to be sold on rallies through $1950/70 levels going forward. Ideally, prices should stay below the $2075 mark and bears are expected to be back in control soon. Watch out for resistance above $1930 and around $1980 zone.
Short against $2075, target is open.