Gold rallied to 1530 early in the London session. The following looks at what could happen based on the Elliott wave theory.
September 03, 2019 | AtoZ Markets – Gold has returned to the upside although it’s still a bit away from the 1550 top. The yellow metal temporarily halted from the one-year bullish trend that saw it hit its highest price in six years. In just over a week, the metal dropped over 380 pips to make another intraday bottom at 1516.
US and China trade talk continues to support the bullish drive for the yellow metal. The US and China officials are finding it uneasy to schedule a trade talk in September. President Trump continues to portray that the talk is progressing probably to stabilize the stock market but we know that’s not the case. The news over the weekend was that the US has rejected Beijing’s request to delay its new tariffs. Putting all these together, it seems no agreement is in sight as it’s evident that there is mistrust between the two economic powers. As the uncertainty prolongs, the yellow metal will climb further until Friday’s US employment data.
Gold analysis: important price levels
Gold is retesting the 1531-1533 resistance zone after two failed attempts since Friday. If it does break upside this time, the price will be expected to hit 1555 and extend toward the 1600 handle. To the downside, if the price is rejected at this zone, it might continue the sideways move between 1533 and 1519. A bearish breakout might eventually happen to 1500, 1480 and 1451.
Gold Elliott wave analysis
In the last update, we labelled the dip from 1555 to 1516 to have completed a corrective dip. Price is now expected to advance after a head and shoulder was emerging with a neckline at 1533 as the chart below, used in the last update, shows.
A breakout above 1533 was expected. Price has advanced to 1532 as the new chart below shows.
Gold is now at the brink of breaching 1533 to the upside to validate the head and shoulder reversal pattern. The bullish trend is expected to continue toward 1600 after hitting 1550 bullish target.