Technical outlook:
The 1-hour chart for gold has been presented here for near-term trade setups. The chart is indicating a potential drop towards the $1,635-40 area from here before finding support. The yellow metal rose sharply towards $1,670 last week. Potential still remains for a push through the $1,685-90 zone before the price turns lower again.
Gold might be poised to complete an Up Gartley around $1,635.40 before resuming its counter-trend higher towards $1,685 going forward. The metal is working on a larger-degree downswing between $1,670 and $1,618 levels as seen on the 1-hour chart here. Prices might want to retrace at least 62% of the entire drop, which is seen through the $1,685-90 zone.
Gold might have completed its first leg higher at $1,670 and is right now correcting lower to terminate its second wave lower through the $1,635-40 zone before resuming its final leg higher towards $1,685. Also, note that $1,685-90 is the Fibonacci 0.618 retracement of the above bearish downswing and hence, a high probability remains for a turn lower again.
Trading idea:
Potential rally towards $1,685 after dropping through $1,635-40.
Good luck!
