Gold (XAU/USD) is continuing with its downtrend after it showed another new low around $1200. The strong bearish momentum is suggesting a continuation.
Gold completed a bullish corrective wave 4 as expected in our previous wave analysis for Gold after breaking below the support trend line (dotted blue) and posting a new low. This could complete a wave 5 (orange/brown) of wave 3 (green) for instance. A new correction is taking place as indicated by the support (blue) and resistance (red) trend lines. A bullish breakout suggests a larger wave 4 (green) pattern via an ABC (orange), whereas a bearish breakout could indicate an immediate downtrend continuation.
XAU/USD has probably completed a strong bearish wave 3 (green) and a pullback could be part of a corrective wave 4 (green). A new low is still expected to complete either wave 3 (blue) of wave C (purple) or immediately wave C (purple).
XAU/USD is expected to show a strong bullish bounce at the support zone (green lines) as price could be completing a larger wave 1-2 (light purple) pattern.