Have you wondered how far the bears will go on Gold?. Will there be a rally soon?. The following looks at what can happen in the coming days and weeks based on 9 May Gold Elliott wave analysis.
09 May, AtoZForex - The price of Gold dropped further below 1230 putting more pressure on the bullish trend. The 1194.6 support is up for the price to take but a bullish breakout could ensure the rally resume after about 4 weeks of weakness. In the last update, we looked at a bearish correction formed within a channel. zigzag patterns are known to be contained within a trendline. The pattern easy to trade because a simple breakout of the channel could trigger an opportunity. The chart below was used in the last update.
The chart above shows the Zigzag pattern in the final stages. If price stays above 1230 and breaks above the channel significantly, a fresh bullish journey should be expected. This can set price toward 1400 thereby giving more than 1200 pips for the buyers if all go as expected. Further bearish strength below 1230 will invalidate this setup and set price further downside.
Price broke below 1230 thereby deviating from our channel formation. This dip is expected to be a correction formed between early March and mid-April. The correction is a zigzag pattern. Wave (C) of (ii) of the zigzag is getting more extended than wave (A) of (ii) and the whole correction wave (ii) deeper than 61.8% Fibo-retracement of wave (i). This happens sometimes. That's why it's important to wait for price to show a sign of reversal like a breakout above the channel line.
9 May Gold Elliott wave analysis: what next?
Price could make one last dip to 1210-1220 before breaking upside. The wave count will be invalid if price breaks below wave (i) low at 1194.6. If price stays above 1194.6, the bears still have the chance to resume. A break above the channel upside and 1237.9 could be a bullish setup for about 1200 pips. Stay tuned to AtoZForex as we bring you more updates.
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