Technical outlook:
Gold prices rose to $1,874 intraday on Friday before pulling back. The yellow metal is trading at around $1,865-66 at this point in writing and is expected to test $1,828 before resuming its rally. Intraday resistance is seen at $1,878 as bears prepare to come back in control in the near term.
Gold has been in a counter-trend rally from the $1,786 lows and is pushing through $1,920. We could see the price that high before it turns lower following the larger trend. The yellow metal seems to be into its last leg rally after carving a higher low at around $1,828 earlier. If the above structure holds well, prices would stay above $1,828 and continue pushing higher towards $1,920.
Alternatively, if the drop from $1,870 is taking a complex correction, prices would drop through the $1,820-25 zone from here before resuming a rally. Also, note that $1,820 is the Fibonacci 0.618 retracement of the recent upswing between $1,786 and $1,870. Traders will be looking to add more longs if prices drop towards $1,820.
Trading plan:
Potential rally through $1,920 against $1,781
Good luck!
