Technical outlook:
Gold prices dropped to fresh intraday lows around $1,934 on Friday, breaking below the counter trend line support as seen on 4H chart here. Please note that potential still remains for a drop through $1,920 initial support before producing a meaningful pullback. The yellow metal might have produced a meaningful downswing between $1,998 and $1,934 now.
Gold has carved a potential lower high around $1,998, which is extremely close to the Fibonacci 0.618 retracement of its earlier downswing between $2,070 and $1,890 levels respectively. If the above structure holds, prices should ideally stay below $1,998 mark and continue dragging lower through $1,676 and deeper.
Gold structure is presenting a bearish outlook with its downswing between $2,070 and $1,890, which is followed by a corrective rally towards $1,998 levels. Ideally, a sharp decline should unfold from here with prices staying below $1,998 mark. Intraday pullbacks remain possible and they should be seen as opportunities to initiate fresh short positions.
Trading plan:
Potential drop through $1,676 against $2,080
Good luck!
