XAUUSD Can Stop At 4220 Resistance

Gold came down perfectly and stopped at the 4027 level, which was the swing support from last Wednesday. Notice that what we are seeing now is only a corrective decline from the 4200 area, so it looks like another retest of that region is still possible. However, we still think the recovery will be limited, with the first important resistance around 4220. 
 

Overall, for metals we still prefer the bearish scenario unless we see a new impulsive recovery on the intraday charts, which I don't think is the case yet. This becomes even more evident when looking at Silver, but more importantly at the Gold/Silver ratio. There we have seen some rise this week, but the ratio is still not trading at the February highs, which remains our expected target for the current wave C. As long as the Gold/Silver ratio continues to trend higher, it suggests that metals will remain under pressure, since a rising ratio generally confirms a bearish environment for precious metals.

Want more analysis? Join wavetraders.com and take a trial, with full free access

Grega