Technical outlook:
Gold prices have rallied through $1,865 mark on Friday, carving a new swing high but remained below the critical resistance at $1,877. We have changed the wave labelling on the 4H chart presented here. The larger degree AB boundary remains between $1,877 and $1,753 levels, while C is now looking in place around the $1,865 mark.
Gold could produce a sharp bearish reversal if the above ABC structure holds well and prices stay below $1,877 mark going forward. If a lower top is in place around $1,865 mark, bears will be inclined to come back in control from here and drag prices through $1,753 mark going forward. A break below $1,820 will be encouraging for a further bearish decline.
Gold is well supported around $1,780, followed by $1,753 levels as marked on the chart. The yellow metal can produce at least a corrective drop towards $1,820 levels before turning higher again. Only a drop below $1,780 will confirm that a meaningful top is in place and that bears are back in control.
Trading plan:
Potential short term drop to $1,820 against $1,877
Good luck!
