Gold Technical Analysis, September 1, 2020

Exclusive Markets Analysts
Exclusive Markets Analysts


Technical Outlook:

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.

Trading Strategy:

Short against $2080, targeting below $1450.

Legal Disclaimer: This article is not investment advice. The data provided is for marketing material purposes and is not intended to confuse nor guide our clients on trading decisions. Any investment activity performed is perceived to be a self-directed decision. Exclusive Markets is not liable for losses that may occur because of a decision made after reading the information published on our research page or any other media.

Risk Warning: Trading the capital markets is risky therefore further knowledge and experience may be required. Apply appropriate risk and money management always and ensure the implementation of safe leverage.

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