Gold seems to have carved a major top around $2075 levels. The yellow metal has been drifting sideways since dropping towards $1862 lows and might carve a lower top around $2000 handle. Overall, bears are looking determined to resume lower from here.
Gold had reached $2075 levels early August, before reversing sharply towards $1862 mark. The yellow metal has been drifting sideways in a potential contracting triangle, since then. High probabilities remain for a sharp decline towards $1450 at least, after triangle termination.
The larger degree wave counts are still suggesting that Gold is unfolding as an expanded flat since $1920 highs in 2011. The earlier drop between $1920 and $1046 could be seen as Wave (A), while subsequent rally through $2075 could be Wave (B) of the expanded flat corrective structure.
If the above proposed wave counts are correct, Gold should resume lower towards Wave (C) anytime soon. Ideally, the drop should exceed the low at $1046 in December 2015. It is too early to confirm a potential trend reversal at this moment, but a break below $1862 would confirm.
Gold should be facing short term resistance around $2000/50 mark and high probability remains for a turn lower if prices are able to reach there. Alternately, Gold might be drifting sideways for now before producing a thrust rally towards $2075 and higher.
In that case, we shall wait for a potential top and reversal to enter selling again. Either way, Gold is setting up for a huge reversal from here or above $2075 levels. Upside remains limited from here and it would be a safe strategy to sell on rallies.
Short against $2080, targeting below $1450.