The violent gold decline smells like a zigzag crash with a trailing diagonal. When there is an "ABC" decline of any type then chances are extremely high that at a bare minimum a 100%
retracement is coming. If I was playing short, I would instantly close out my short position and switch to a long position in one move. If I was short only one Forex gold I would buy back two and instantly be in a long position. Catching a falling knife is what you have to perfect if you want to trade any Elliott Waves. Not too many traders can do that especially if they don't understand or pay attention to their net cash positions all the time.
The speed and the angle are enough to change my mind and look for a move in the opposite direction. In this case I would want gold to push above my questionable top, which could be a wave 1 and we just finished a wave two.
Now we have to observe on the
intraday charts to try and catch the bullish move if it starts to fail. If a move did go to new highs, but an inverted zig zag formed, then we would make the same move again but reverse into a bearish position.
Even if another "C" wave bullish run were to happen, it should also retrace 100% or more of this recent decline.