The ounce of Gold (XAUUSD) reached our Potential Exhaustion Zone. The golden metal completed a fifth extended wave. Today, XAUUSD lifted to the previous consolidation zone. In this post, we’ll unfold what to expect from the precious metal for the coming days.
The fifth wave completion
As we commented in our post “Gold- Careful with the Euforia”, released on August 15, we suggested that we were facing a fifth extended wave. Factors as the trade war fear, Jackson Hole meeting, and the G7 summit, aided to trigger the price to climb as far as the potential exhaustion zone proposed reaching $1,555.33 level.
After Monday’s retracement from the higher high until the previous week high, the price action led to a XAUUSD bounce. The last zone consolidation is stopping the intraday rise. This intraday upside could provide us with a possibility to try short positions considering the $1,505 level as a potential mid-term target. The invalidation level is at $1,555.35.
From the last Commitment of Traders report, we observe that 87.07% of institutional traders are placed in the long side. This institutional positioning level makes us foresee that it is time to consider short positions instead of long positions.