Gold prices have reversed sharply toward $1780 levels in the past few trading sessions losing over 100 points. Bulls have managed to hold prices above a critical support around $1758 mark until now. Also note that the yellow metal has bounced off a short term trend line support.
Gold will be back in control of bulls if $1758 holds well and they might be inclined to push through $1877 high, going forward. Also note that Gold prices have tested the fibonacci 0.786 retracement of rally between $1758 and $1877 levels respectively.
Gold medium term wave structure still looks constructive for bulls with Waves (a) and (b) in place around $1834 and $1721 levels earlier. The yellow metal is progressing within Wave (c) since then and might unfold as a combination W-X-Y towards $1900 mark.
Alternatively, a break below $1758 will confirm a five wave decline from $1877 levels, carving an impulse. It would bring back bears under control and Gold will be good to sell on rallies thereafter. For the moment, we remain optimistic on the long side.
Traders might be inclined to initiate fresh long positions around current levels ($1797) with risk below $1778 mark, and potential target above $1877 levels respectively.
Prepared by
The Profinacademy.com Team
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