Gold has completed bullish impulsive wave at the threshold of $4700 and a follow up A-B-C correctional wave has begun.
Wave A is almost complete at $4397 and current bullish consolidation is forming Wave B which is expected to witness a bounce towards $4580 – $4620 but price needs to show a strong breakout above immediate hurdle $4510
Once Gold completes bounce back and mitigates $4580 – $4620, we expect formation of Wave C which may extend downside correction towards $4330 – $4250
If selling pressure intensifies, near term correctional drop may extend to $4100
Traders will watch reaction to immediate challenge at $4510 and a strong breakout followed by recovery bounce towards $4580-$4620
Rejection on heights are likely to witness selling bets being repositioned while value buying will be seen at the deeper correction around $4330-$4250
It should be noted that precious metals are data and news sensitive in a rapidly evolving dynamics of fiscal and geo political headlines that directly and substantially impact dollar denominated Gold prices.
Gold traders are also watching the resistance in Dollar Index at 99.90 which affects Gold prices.
The current drop in Gold is a correction amidst a broadly bullish trend which many traders see as value buying at bargain than chase the overheated rally.
Note: The views expressed are based on price action dynamics and not meant to be a trading recommendation.
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