Gold Price Bearish Price Action Continues – $1,720 Comes Next

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Written By: Mircea Vasiu
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    Summary:
  • Gold price continues its bearish breakout and now eyes a move to the $1,720 level. What will it do once there, considering that gold is leading other markets?

Gold price broke below the apex of a running triangle yesterday. The bearish move triggered a higher USD reaction across the board – albeit it was quickly reversed.

However, gold continued its downside and now eyes the measured move of the reversal triangle that formed above the $2,000 level. If gold leads, expect the USD to follow sooner rather than later.

Gold Price Breaks Below the Apex

The technical perspective on gold here is more than interesting. The move to an all-time high followed a breakout of a running triangle. Such triangles typically form at the end of complex corrections. One place for such complex corrections to form is the fourth wave of an impulsive move.

According to the Elliott Waves Theory, the fifth wave is just an excuse to start selling after a bullish impulsive structure. So does gold price action suggest – a fifth wave completed on the move to the $2,000 level, and now the market corrects.

The measured move of that triangle (i.e., the brown line on the chart below) points to $1,720 before anything. Therefore, bears may want to stay short with a stop at the previous lower high. By doing so, the risk-reward ratio exceeds the minimum requirement of 1:2.

Gold Price Forecast

Written By: Mircea Vasiu

Mircea, MBA in International Business graduating Magna Cum Laudae, trades for a living and contributes to various financial publications for more than six years. He writes about macroeconomics, stock indices, currencies, and most recently ETFs and individual stocks. For the past decade, he’s involved in everything trading related, mostly in the currency market, both with manual and algorithmic trading.

Published by
Written By: Mircea Vasiu