Gold is preparing to test $1835 near term

Gold is facing interim resistance around $1785-90 zone and might be preparing to reverse lower toward $1750-55 zone. It is expected to find support there since $1750-51 is also fibonacci 0.618 retracement of the rally between $1721 and $1800 levels respectively.

Gold had earlier rallied between $1677 and $1834 as an impulse wave. As expected, the subsequent drop through $1721 proved to be corrective. If the above proposed count holds well, the yellow metal could push above $1835 in the next wave.

The entire structure might be unfolding into a zigzag (a)-(b)-(c), as labelled on the chart here. A lower degree wave I seems to be in place around $1800 mark. Bears are looking poised to drop through $1750-51 to terminate potential wave ii there.

We can expect a wave iii of (c) rally to unfold thereafter, pushing through $1835 resistance and up to $1865 levels in the next several weeks. Intermediate support comes in around $1721, while resistance is at $1800, followed by $1835 levels respectively.

Traders might remain inclined to initiate fresh long positions around $1750-60 zone, with risk below $1720 and potential target toward $1835 at least.

Prepared by

The Profinacademy.com Team