Gold seems to have gone sailing in the ocean. Your first though might be that is a funny metaphor for the chop in the market. But Gold has been far from a choppy market in the short run. It may be harmonically in tune with the ocean though. Take a look.
The chart above shows a bearish Deep Crab harmonic. The initial move lower retraced about 88.6% and then a pullback before an extension to 161.8% of the first leg. It came very close to completing (1337 would have been ideal), before reversing lower. There was a pause after retracing 61.8% of the pattern and now it had a slight pause at 78.6%. The next level to watch to the downside is the 88.6% retracement at 1141. This fits well with weekly support levels at 1140. A failure there would look for a full retracement to 1130.40.
There are some signs in the chart that suggest the fall may end soon though. The first is lower shadow on the candle printed Tuesday. It is also outside of the Bollinger Bands®. And finally the RSI has moved into oversold territory. But there is one other signal that suggests the fall may continue.
The second chart looks at the price history from the November low and sees a bullish Shark harmonic. The leg higher and pullback followed by a 161.8% extension of the move higher and then a drop. This pattern has two potential places where it would reverse higher, Potential Reversal Zones or PRZs. The first is at the 88.6% retracement of the initial leg or to 1141. The second is a 113% extension of that leg or to 1107. This is very close to the next lower support area from the weekly chart at 1100.
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