In the course of the last few trading days, the gold price has risen well above our forecast target. Although we had described the rise to the high of wave (B) as an option, we did not really want to believe it. With this rally, gold was able to stabilise significantly and also put itself in a slightly better light again. However, the still smoldering correction could not be thrown overboard. This puts the recent rise into perspective again very clearly.
Outlook for the gold price
The gold price is currently still forming wave (B) of the ABC correction that has been ongoing since February. As is not unusual for a “B”, there is the possibility of an overshoot. The possibility of an overshooting wave “B” forming. At the moment we do not see this option heading towards the precious metal. The next few days will be positive again. However, the available potential seems small. For with the 0.62 retracement at $1,651, a resistance that should not be sneezed at is within reach.
At the most, we grant the trend the rise to the 1.00 line at $ 1,685 an ounce. Only the option of an overshooting (B) would justify a significant crossing of this line. After the completion of (B), disillusionment will return to the gold price. As a result of the correction, a sell-off to the level of the 0.62 retracement at simulated $1,544 should be expected. As the long term chart shows, we remain negative on the gold price in the medium term.
The gold price is forming a small upward trend within a larger correction. However, this movement is not suitable for a longer-term engagement. We would therefore advise against a positioning at this point in time. Hedge positions on the 0.62 retracement at $1,590.