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Gold Elliott wave analysis: bullish correction continues to 1535

Gold Elliott wave analysis: bullish correction continues to 1535

Gold has been more demanded this week. The metal surged to 1535 on Tuesday. The following technical analysis is based on the Elliott wave theory.

September 25, 2019 | AtoZ Markets – The yellow metal has returned upside. It currently trades in the 1520-1540 zone. If it rallies further above 1557, the chances of breaching the 1600 psychological level will increase. On the other hand, the larger bearish correction might have another chance to continue below 1480 to 1450. 

The geopolitics in the United States is getting more intense with the concerns on Trump impeachment. Furthermore, the optimism of a US-China trade agreement flopped after Trump’s strict talk at the UN General Assembly on Tuesday. He said he would not accept a bad deal. The more of these uncertainties and conflicts, the more the demand on Gold and other safe-haven assets. Gold is now trading between 1557 and 1484 which are the main resistance and support levels respectively.

Gold analysis: important price levels

Resistance Levels: Price now has 1557 to contend with once the 1520-1540 zone is breached. 

Support Levels: Before the 1400 handle, 1485 and 1451 are the critical support levels

Gold Elliott wave analysis: long term forecast

From the weekly chart above, the long term trend is clearly bullish. Using the Elliott wave to measure how far the bullish trend has gone, we discover an impulse wave could be emerging toward 1800. The wave analysis is represented with primary, intermediate and minor degrees. The price is breaking above the primary degree channel line but the confluence of the 161.8% Fibonacci projection of wave 1 from 2 of the three degrees is offering resistance at 1532-1571 zone. It now remains to be seen whether the price will hit the top of this zone at 1571 or even surpass it slightly before dropping. Anyways, the primary and intermediate wave 3s should shoot away from the top of the channel significantly. While the long term trend pattern continues to emerge, we look at the sub-waves of wave 3 and 4 of the minor wave. 

Short-term forecast: wave 4 (minor degree) emerging?

The (possibly wave 4) dip from 1557 looks corrective with more room downside. The bullish correction from 1484 looks like a flat pattern. In the last update, we had the chart below.

We expected a break below the wave (y) trendline to get the first confirmation. However, the Gold price surged further. A flat pattern is probably emerging as the new chart below shows.

The same breakout system as the last update also applies here. On the contrary, if Gold mounts above 1557 instead, we will have to take another short term outlook. 

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.

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