Gold is breaking upside toward 1240 and might complete a corrective pattern. The following 25 July Gold Elliott wave analysis looks at what could happen next based on Elliott wave theory.
Gold broke above the intraday bearish zone today. It’s about to break above the wedge formation we have been looking at. The rally is expected to be the 4th wave of the bearish impulse wave that has dominated the year. In the last update, we looked at the possibility of price hitting 1235 en-route to 1250. At 1235, price would have broken out of the wedge pattern. In the last update, the chart below was used.
The drop back to the reversal zone (box) is deep and sharp but we have seen a small bullish sign with a minor bounce from 1215. If the bounce results in a break above 1235, price will make its way to 1250 at least. A dip below 1210 will lead to the continuation of the bearish run. At the moment, the original forecast we had is still valid but can easily be invalidated unless a breakout happens soon.
Price is now heading toward 1235. If price does breakout, we will see if it was a small bullish correction (which should end at or below 1250) or the big corrective wave 4 (which should be higher than 1300). The first corrective wave 4 should start with an impulsive first leg. The chart below shows the new update.
25 July Gold Elliott wave analysis: what next?
If the breakout is rejected heavily at 1242 short term reversal zone, we might see price dropping from there to make lower prices. If the rally breaks significantly above 1242, we might see price at 1290 as it completes the first leg of wave 4 (in green). Stay tuned for the next update.
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