Gold continues to oscillate within a potential contracting triangle structure after printing highs at $2075 on August 06, 2020. The yellow metal had initially dropped sharply through $1862 levels. Since the last 4 weeks, it has remained subdued within a triangle consolidation.
Gold probable wave counts are as follows: A triangle structure could be lower degree Wave 4, before producing a thrust rally above $2075. Alternately, if a meaningful top has been carved at $2075, the yellow metal might break below $1862 confirming a bearish reversal.
Either way, the metal needs to break out of the consolidating structure, to confirm the next larger direction. A failure to break past $2015 could be seen as an indication of potential bearish reversal ahead. Immediate support is seen around $1900, while resistance comes in close to $2000 levels respectively.
If Gold manages to break below $1900 levels, it would threaten to take out $1862 interim support. Once $1862 breaks, it should be seen as a confirmed trend reversal and bears would be inclined to take out $1670 support going further.
Alternately, if prices are able to take out $2000 and subsequently $2015 resistance, it would threaten to break above $2075 and push through $2100/200 levels before finding resistance again. The yellow metal might reverse lower thereafter.
Traders might stay aside until prices oscillate within contracting triangle. They might initiate trades on a breakout of the triangle on either side. Aggressive traders might remain short with protective stops above $2075 levels.
Technical Analysis Team
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