Gold broke another support suggesting an explicit domination of bears. On the other hand, there are two well-known statements. The first one: the longer the swing, the closer the correction. The second: important levels have a bigger effect within an undirected (flat) structure.
Based on these statements, we can assume that gold will shortly switch to correction. Now reaching long-term support at 1848.48-1859.96 by the market would look reasonable. But also forming of a reversal signal at current levels may take place.
Local structure keeps a bearish tone so far and it’s forming another trending swing. Thus we can expect a decline of the quotes under the closest low (1859.73).
Main scenario: Decline to 1848.48, then a steep upward bounce.
Alternative scenario: Upward reversal from 1859.73 in direction 1877.00-1878.00.
Shorts to 1848.48.
Longs from 1848.48.
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