Let me explain you why I think that gold is working on a major top.
The major rally made an all time high in gold at 2,067.10 in September 2011.
Off that top Gold dropped in an impulsive fashion and bottomed at 1,156 in December 2015.
That drop could be only the first leg down in wave ( A ).
Off that bottom Gold has been in a corrective looking ( A ) up – ( B ) down – ( C ) up structure.
In corrective A-B-C structures the final wave ( C ) up always comes as a strong rally.
Such rally has an impulsive structure.
On the chart you can see five waves inside that wave ( C ) of [ B ] up.
Moreover, note that Gold is entering the Red Supply zone.
In December 2011 and in May 201 Gold found support at 1,661.80 and 1.658.50 respectively.
In September 2011 Gold dropped to 1,678.40.
In February 2013 Gold found temporary support at 1,674.50.
No doubt that strong support will turn into resistance this time.
150% extension of wave ( A ) up = 1697.30.
58.6% retracement of the strong decline from 2011 top into the December 2015 bottom is located at 1,693.20
All those levels form a super strong cluster of resistance levels.
Under that count Gold may get stopped by that Red Supply zone and start a new impulsive decline in wave ( C ) down targeting lows under the previous low made at 1,156 in December 2015.
Now let’s zoom in to see more details of the structure of a large wave ( C ) up that may complete a corrective (A)-(B)-(C) up off the low made in December 2015 ( see the daily chart below ).
We can see a perfectly completed five wave up structure.
Here Gold is testing 58.6% retracement of the first leg down in wave [A] down (decline from the top made in Sep 2011 to the bottom made in Dec 2015).
In theory that very final subwave C of 5 may extend to 100% – 123.6% of subwave A of 5 ( the dark Red Box).
Now violation of the low made by subwave B down of wave 5 up at 1,551.10 would be the first confirmation of completion of the rally that started at 1,217.20 back in August 2018.
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