Forex Signals

Gold – Breakdown Suggests Further Declines


Gold prices in its 2-hour timeframe remain moving in a consolidation structure identified as a triangle pattern. At the same time, the price action reveals a breakdown in its internal sequence, suggesting the likelihood of additional drops.

According to the Elliott wave theory, the price advances in a triangle pattern, which consolidates the first downward movement that began when the precious metal topped at $2,075.14 per ounce on August 07th. With the short-term ascending trendline between waves d and e of Subminuette degree identified in green, the yellow metal unveiled the completion of wave e. It opened the possibility of a new bearish leg of the upper degree.


On the other hand, the RSI oscillator shows a breakdown that pierced below level 40 and consolidated in 41.4, confirming the intraday breakdown developed by the precious metal and increasing the downward move’s likelihood.

In a conservative scenario, the Gold prices could decline toward the $1,925.93 per ounce, which corresponds to the last swing of September 09th. The invalidation level of our bearish scenario will occur if the price soars over $1,952.93 per ounce.


Trading Plan Summary

  • Entry Level: $1,943.93 per ounce
  • Protective Stop: $1,952.93 per ounce
  • Profit Target: $1,925.17 per ounce
  • Risk/Reward Ratio: 2.08
  • Position Size: 0.01 lot per $1,000 in trading account.


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By Eduardo Vargas

Eduardo Vargas is a technical analyst and independent trader based in Buenos Aires, Argentina. He is an Industrial Engineer and holds a Master in Finance degree. In 2008 began to trade Chilean stocks listed on IPSA. From 2013 started to trade CFDs on Forex, Commodities, Indices and ETFs markets. He analyses different markets combining the Elliott Wave analysis with Fibonacci tools. He provides a market mid-long-term vision.

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