Last month, Comex Gold prices crashed by more than$200 an ounce - the steepest plunge in over 30 years. Along with Comex Gold, MCX Gold prices recorded the biggest ever fall of Rs 1250 per ten gram, hitting a one year low of 25200 in April 2013.
After a sharp fall in overseas and domestic markets, prices have shown a smart up move, testing the crucial resistance levels. On this bounce back, many investors has started to accumulate Gold and positional traders have built long positions. A strong break out from the triangle pattern, failure of crucial levels to provide any meaningful support and Elliott wave theory suggest the end of multiyear up trend and start of down move in yellow metal.
MCX Gold Continuous Daily chart:
MCX Gold 60 mins chart:
Wave Analysis: Above is the daily chart of MCX Gold. Prices have breached the wedge pattern break out, and moved lower sharply. This is in sync with Comex Gold, indicating the bearish trend over medium term.
We can observe the above in the MCX Gold 60 mins chart: prices reversed exactly from 50% retracement of the prior wave iii, breaching the small upward sloping blue channel on downside and cloing near day’s low of 26365.