Gold – 2 Possible Scenarios. We prefer the bullish Scenario.

Gold has climbed from $1045 back in Dec 2015 to a high of $2074.95 on 2 August 2020. But is this the high or can Gold go higher? Looking at the monthly chart, it seems that the rally is not completed. We are likely to see another attempt for the topside to complete rally. While Stochastic is in the overbought zone, MACD is high above the zero line, which is a sign of a strong bullish trend. 20EMA is also point up with a steep slope, which is also hinting of a bullish price trend ahead.
If we take $2074.95 as the high, we can see that the correction unfolded in a A-B-C manner on the weekly chart with the C almost equal to A. The correction came down to the Fibonacci 38% of the rally. As the correction was in the form of a price decline, the main trend is bullish. If $1764.40 is the end of the correction, we are likely to see price testing the previous high and going higher than $2075 in the next few months ahead. Stochastic is turning up from the oversold zone and MACD is also turning up from the zero line. Momentum indicators are hinting of a price rally ahead, which support the bullish view.
There is also the possibly of a larger or bigger correction. In this scenario, we could see price moving higher to the previous high of $1964.40 and if price is unable to move above this resistance point, there is a possibility of a bigger A-B-C correction which could bring price lower to $1681 in the next few months. Watch out for the trigger point at $1965. We do not favour this scenario. We are bullish for $2100 in the next 3-6 months ahead.

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