First of all I would like to clear out that I’m a Gold bull believing that Gold has made an important long-term low at $1,045 and that the next bull market for Gold has started. Now that this is out of the picture I would like to point out the possibility of a deep pull back towards $1,200 or even a bit lower near $1,170. In the chart below I point out the wave count I see in Gold and what naturally follows is a three wave correction that should at least reach 38% Fibonacci retracement. However the most probable Fibo level to be reached is the 61.8% level.
With blue lines you can see also a possible megaphone pattern. The weekly rejection at the upper boundary of the megaphone pattern is an initial bearish reversal signal that should not be taken lightly. Short-term support at $1,350 is broken so we look for the next one near $1,335 (NFP Lows) and then towards $1,285. At $1.250 we find the 38% Fibonacci retracement and if this scenario plays out, this level will surely be seen.
So a possible scenario that could become my preferred wave count implies that a pull back has started in Gold and we should wait patiently to buy Gold for the next leg up above $1,400 most possibly towards $1,600.
Thank you for taking the time to catch up on my thinking.