Market Cap:
$262.6B
BTC Dominance:
67.74%
btc:
$9920.86
eth:
$209.16
xrp:
$0.27
Advertise
Forecasts

Gold Elliott wave analysis: bearish correction might continue below 1500

Sanmi Adeagbo | Sep. 9, 2019
Gold Elliott wave analysis: bearish correction might continue below 1500

Gold continues to knock downwards with a break below 1500 now close. the following technical analysis is based on the Elliott wave theory.

September 09, 2019 | AtoZ Markets - A bullish break away from the 1550-1555 resistance zone was rejected again last week. The yellow metal then fell to 1502. A minor surge happened to 1527 afterwards after the negative NFP data dragged the Dollar down. However, Gold continued to be dragged southward and is now close to the 1500 handle. This week, so far, the minor recovery to 1513 couldn't be sustained by a significant bullish momentum and the bears are now probably gaining the upper hand. Although the over-all prevailing trend remains bullish, the current bearish correction might dig deeper as a result of some profit taking by the bulls.

The major Gold bullish driver over a year has been the US-China trade war which has skyrocketed the demand for the safe-haven commodity asset. However, last week, the US and China have agreed to start a new session of face-to-face negotiations in early October. Meanwhile, a truce was not included in the pre-meeting agreement. 

After the fresh tariffs sanctioned by both parties in August, US goods exported to China will attract 20% tariffs while the Chinese exports to the US worth $520 billion will incur 22% tariff. Meanwhile, the decision to resume talks has calmed the market and led to traders and investors cashing out on their Gold positions as an agreement will reduce the demand for the metal and dragged its price lower. In addition, there are high impact fundamental events this week from the US, which include inflation and retail sales reports.

Gold analysis: important price levels

Gold price has broken below the 1516 intraday support but 1500 is still holding firm. A break below 1500 is expected to drag the price to 1480 and 1451 support levels in the short-term. To the upside, the price might still test 1516 and 1527 intraday resistance levels before dropping further. 1550-1555 resistance zone is looking unsurmountable now. 

Gold Elliott wave analysis

In the last update, where the chart below was used, we reckoned a significant Elliott wave bullish trend has ended at the 1550-1555 resistance zone after the price completed a double top pattern with the neckline at 1516.

The minor bounce is so far short of 1533 that was expected. The chart below shows that apart from the double top pattern, another reversal chart pattern might emerge.

A head and shoulder reversal pattern is also emerging at the top with neckline at 1502. The second shoulder might go as high as 1533-1545. If the price eventually breaks below 1502, the next target will be 1451 followed by the 1400 psychological level. 

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.