I have been bullish of gold for quite a long time having seen this inverse head and shoulders formation emerge over many years.
After the relatively extreme move upward in recent months it’s quite easy to see how this ran out of steam finally around $1550. The question now is how far will it retrace?
I see two options here:
First (and my core hypothesis) is that we will see a retrace all the way back to the breakout area around $1400. This would be around 61.8% of the most recent wave AND coincides with the pivot support level in the same area.
Second, is a shallower retrace to the higher pivot support around $1475.
I’ve illustrated my likely path & you can see my target price of $1800 on here which if the symmetry of this chart plays out we would hit sometime towards the end of Q1 next year.
So be patient gold bulls. Hold if you are already long, don’t go long here is you aren’t yet, but do look for the opportunity to buy this dip keeping an eye on the two levels I’ve highlighted.
After the relatively extreme move upward in recent months it’s quite easy to see how this ran out of steam finally around $1550. The question now is how far will it retrace?
I see two options here:
First (and my core hypothesis) is that we will see a retrace all the way back to the breakout area around $1400. This would be around 61.8% of the most recent wave AND coincides with the pivot support level in the same area.
Second, is a shallower retrace to the higher pivot support around $1475.
I’ve illustrated my likely path & you can see my target price of $1800 on here which if the symmetry of this chart plays out we would hit sometime towards the end of Q1 next year.
So be patient gold bulls. Hold if you are already long, don’t go long here is you aren’t yet, but do look for the opportunity to buy this dip keeping an eye on the two levels I’ve highlighted.