Gold had print life time highs in August 2020 at $2075, and since then it has been drifting sideways. The yellow metal had dropped sharply to $1862 mark right after hitting highs. If a meaningful top is in place, it needs to break below $1862 to confirm.
Gold has been in a corrective phase at a larger degree since $1920 highs in 2011. The metal might be unfolding as an expanded flat corrective wave. It is called a traders’ nightmare, since price actions pushes beyond extremes within an expanded flat.
Gold had earlier dropped through $1046 lows in December 2015, potential Wave (A) of the expanded flat. The subsequent rally towards $2075 might be potential Wave (B). If the above is correct, the yellow metal could be preparing for a turn lower towards $1046 over the long run as Wave (C) unfolds.
Another possibility is that Gold is still carving Wave (B) and is consolidating within a triangle, before producing a thrust rally above $2075. If the above unfolds, we could see a bullish break from here, pushing prices towards $21000 or higher before reversing.
We remain neutral at the moment and allow price action to confirm the next major move. Bears would remain in control if Gold breaks below $1862 levels. At the moment, Gold might be facing resistance around $1965/70 levels and turn lower again.
A push through $2000 would threaten $2075 highs in the next few trading sessions. Aggressive traders might remain short with protective stop at $2088.
Aggressive traders remain short against $2088, target is open.