Gold dropped massively yesterday but it seems there will be a bullish push in the coming days. The following 18 July Gold Elliott wave analysis gives useful technical insights.
Gold has completed an impulse wave wedge pattern just around 1220 price level. This pattern is a reversal price pattern. In the last update, we identified this impulse wave wedge as the 3rd wave of a larger degree impulse wave (which should be followed by a corrective rally to mark the 4th wave) or the c-wave of a large degree zigzag pattern (which would mean a complete bullish recovery in the coming weeks). The former is more likely. The two forecasts both point upside at least in the nearest term. In the last update, the chart below was used.
The chart above shows two scenarios. The first scenario in green, shows the emergence of an impulse wave which suggests, if there is a break above the impulse wave wedge, we should see a bullish corrective move up to 1270 or slightly above before the dip continues. The second scenario in red suggests the drop could be a zigzag pattern and we should expect a fast impulsive rally to the 1270-1307 space. The first scenario is more likely. In the two scenario, a bullish move is imminent if price is contained above 1220 and break above the wedge. If that happens, a rally to 1270 or more is expected.
18 July Gold Elliott wave analysis: what next?
Price could be supported at 1220. It will require at least a bullish push above 1230 to start the bullish journey. If price breaks above the upper wedge line, we should see it extend to at least 1266. The speed of move and the pattern up to 1266 would determine which of our two scenarios will hold. In as much as price stays within the wedge, a new low could happen. Stay tuned for the next update.
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