Technical outlook:
Gold prices dropped to $1,818 during the New York session on Tuesday as most risky assets collapsed against the US dollar. Importantly, the yellow metal has settled above the $1,816 interim lows, keeping the bullish structure intact. It is seen to be trading at around $1,821 at this point in writing and is expected to resume higher towards $1,886 at least in the near term.
Gold has dropped between $1,998 and $1,786 in the past several weeks, carving a meaningful downswing as seen on the 4H chart here. The metal has been producing a counter-trend rally since May 16, 2022, after dropping through the $1,786 lows. The corrective wave seems to be into its last leg higher towards $1,920 before bears are back in control.
Gold prices are currently working upon a lower degree upswing between $1,805 and $1,860. Prices have retraced the above upswing through the Fibonacci 0.786 level close to $1,816. The high probability remains for the rally to resume from here and push towards the $1,920 zone, which is also the Fibonacci 0.618 retracement of the above downswing. Looking higher from here.
Trading plan:
Potential rally towards $1,920 against $1,781
Good luck!
