From record high $2,484 Gold drops to $2,366 – Bears looking for $2,330?

It is a usual phenamenon that everytime Gold makes a new record high, a follow up sell off brings a healthy correction which works well for the purpose of rebalancing the equilibrium of overbought conditions and this is also a result of smart money taking out the profits at strategic zone on the initial hints of correction, causng significant decline in prices and the falling sequence continues till fair value is reached. In other words, sell off begins when market dynamics understand that prices have reached premium zone and correctioal decline starts pushing prices taking out fair value gaps left in the process and finally reaches what we call equilibrium followed by discount zone where buyers resurface for bargain buying at value area in anticipation of resumption of uptrend.

Coming to current developements, Gold has completed a significant 61.8% Fibonacci retracement of $2293 to $2484 which aligns with $2366 and some recovery attempts from current lows is likely, even if the extent is limited.

Some buying activity may be witnessed from $2368-$2360 that may take Gold to nearest resistance zone $2384-$2390 which if cleared preferably with a day close, can extend to $2400 psychological handle that coincides with 4 hourly rising 100 SMA.

Next overhead resistance is 4 hourly 50 EMA at $2410 .

On the flip side, rejection from resistance zone $2390 or $2400 will call for retest of $2366 and a tad lower at 50 Day EMA 2360 while break below this support will extend correction to next leg lower 78.6% Fibonacci zone $2334 and 100 Day SMA $2322