Gold is quite a striaghtforward commodity to trade in, but at the same time it had also been very volatile lately. Let's check out the daily chart first.
Look at the bigger picture i believe gold is still in its corrective mode , A-B and a C. This is why I believe that at $1,720 region this commodity will face some strong resistance or headwind. In fact, it tilted down there on to close at $1,696 for the week. Down about $24. That's quite a bit.Overall, my short term bearish target of $1625-30 still holds provided that the recently supported $1675-80 region is taken of convincingly. Do take note wave A and B fell nicely into the channel.
With that let's look at the 4 hr chart.
On the 4 hr, we zoom in closer to the wave C and took at look where exactly are we in wave C. And as you can see recent 1720 price tag should be the wave 2 and if i am right wave 3 is in the progress. Look at the right hand side of the chart. I have observed a pennant chart pattern which, in this case should be more bearish than bullish as MACD pointed out that it is still under the zeronline level on the indicator.But for a pennant price can move either way. Of course, I will expect more sharp movements from this commodity in the week to come!Good luck trading!
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