Gold hit 1262-1265 resistance zone and now appears to be dropping. Will it drop much further? The following give insights based on Elliott wave theory.
December 21, 2018 | AtoZ Markets – The bullish resurgence from mid-November continues this week. Price has hit 1265 from 1196 marking its highest since July. After a Fed rate hike, the dollar-denominated commodity advanced far above 1250 resistance level. The market will shifts its focus to today’s economic data from the US. The US GDP data for 2019 last quarter and last month’s core durable goods orders might cause a short term price fluctuation in the prices of Gold. Will the drop from 1265 continue?
In the past updates, we have discussed about three things concerning Gold long and short term price forecast. First, the rally from 1160 looks corrective. Initially, a double zigzag was proposed at 1243. Price’s drop after the zigzag pattern but was limited at 1196. The drop was expected to lead toward 1120. Price however, rallied from 1196 and broke above 1243 – a triple zigzag ensued. Second, the proposed triple zigzag was projected to have a proposed reversal zone at 1262-1265 as indicated in the last update. At this zone, price was expected to start a new bearish wave far below 1160. Thirdly, an alternative long term bullish forecast if price breaks heavily above 1270 with target at 1360.
Currently, price has been a bit rejected at 1262-1265 reversal zone. A drop below 1260 has happened but not yet enough to justify a free price fall. The potential of a big Gold sell-off is there. The chart below shows the new update.
Gold Elliott wave Analysis and Important Price Levels
The rally from 1196 looks more like an impulse wave. On the larger degree, a triple zigzag correction might have completed at 1262-1265 zone. If price drops below 1250, we might see a retest of 1230. A drop below 1230 should be a confirmation of price’s commitment to the downside. If price stays above 1230, we might see one more rally to 1270. Until price commits downside, the rally might just continue.
Please share your thoughts with us in the comment box below.