Gold eyes above $1916, near term

Gold is drifting sideways at the time of writing and a potential drop toward $1830 remains possible before the next leg resumes higher. Please note that fibonacci 0.382 retracement of lower degree wave iii is also passing through $1832, which could be potential support.

Gold remains in control of bulls as they target around $1890 and $1930 going forward. Also note the Elliott Channel resistance trend line passing through the same zone. A test of the channel resistance and $1900 mark might indicate termination of the corrective rally.

Gold has been rallying in a larger degree corrective wave since $1677 lows. The yellow metal is possibly working to complete Wave 2 of the ending diagonal structure, which began from $2075 in August 2020. Once complete, the metal should turn lower below $1676 as Wave 3 unfolds.

The rally between $1677 and $1834 was in five waves, carving an impulse Wave (a) on the chart. Subsequently, the decline toward $1721 was corrective a-b-c, marked as Wave (b). The metal is unfolding Wave (c) since then, potentially targeting $1900-30 zone.

Traders remain inclined to hold long positions initiated earlier and also add more around $1830 mark going forward. Risk remains below $1800 while potential target is towards $1900-30 alongside the channel resistance.

Prepared by

The Profinacademy.com Team