Technical outlook:
Gold prices almost reached the $2,000 mark before pulling back to $1,990 on Monday. The rally has been in line with our earlier projection and the yellow metal could be close to carving a major top. Bears will be inclined to hold prices below $2,075 mark going forward to keep the structure intact.
Gold prices have almost reached the Fibonacci 0.618 retracement of its earlier downswing between $2,075 and $1,890 levels as seen on the 4H chart here. The metal is giving in to bears quite sharply as prices as seen close to $1,985 at the time of writing. It could be a good strategy to hold short positions and look to add more around $2,000 mark.
Gold had been in a counter trend rally since $1,890 low and might have terminated its third wave close to $1,998 mark. The yellow metal now needs to break below $1,960 initial support to confirm a meaningful top in place. Either way from here or around $2,000 mark, prices are expected to turn lower towards $1,676 in the next several weeks.
Trading plan:
Potential drop aginst $2,080 toward $1,675
Good luck!
