FX.co ★ Trading plan for Gold on May 27, 2022

Technical outlook:

Gold prices climbed above $1m860 on Friday after bouncing off from the $1,840 lows on Wednesday. The yellow metal could be attempting to print another high around $1,880, marked with a pink rectangle here, before turning lower again. A failure to break above $1,870 will invite bears back to the market.

Gold has been producing a counter-trend rally since the $1,786 lows earlier. If the metal is moving within a trading range, prices might drop through $1,815-20 from here and then produce a rally towards $1,920. In the case of a zigzag, prices would rally through $1,880 from here, before producing a corrective decline. Either way, the potential remains through $1,915-20 going forward.

Gold has carved a larger degree downswing between $1,998 and $1,786 earlier. The above move is a retracement through a corrective wave. The price is expected to push through the Fibonacci 0.618 retracement of the above drop, which is seen through $1,920. A high probability remains for a bearish reversal thereafter.

Trading plan:

Potential short-term drop through $1,815-20, then rally towards $1,920 against $1,781

Good luck!