Gold continues to hold above 1474 last week low. The following Gold Elliott wave analysis October 17 update looks at what could happen next from the technical view.
October 17, 2019 | AtoZ Markets – The yellow metal slumped last week after the US-China meeting. There was an agreement between the two nations after 15 months of trade conflicts. A week before the meeting, Gold had resumed the bullish trend when it rallied from 1458 to 1520 before it dropped to 1486. Afterwards, it picked again hit 1516 after some headlines erupted that China was about to withdraw. In the end, the first phase of the deal was agreed and Gold price slumped to 1474 last week. Meanwhile, this week started with a recovery to 1498. However, the bullish momentum went flat and the yellow metal continued to swing within the 1498-to-1474 range. The price is now at a crossroad between continuing the bearish correction or resuming the bullish trend.
The long term trend remains bullish. The short-term trend is bearish and corrective. It’s either we have a more complex and deeper correction or the bullish trend will resume. Apparently, the more preferred outlook is that the bullish trend will continue. The US-China trade war has been the driver for over a year. China recently reiterated that talks went well and there was substantial progress. We will have to see how they both keep to it.
To the upside, the resistance levels are at 1498, 1520, 1535 and 1557. If the price breaks above 1498, the bulls will have another chance to come back. On the hand, the big support level is now at 1458. If the price breaks below 1474, the bears will have a chance to drag the commodity further downside below 1458 and 1451.
Gold Elliott wave analysis
In the previous updates, we expected 1458 to have completed the bearish correction from 1557 at 1458. Afterwards, we started counting an impulse wave rally from 1458. The first wave of this degree ended at 1520 as the chart below, used in the last update, shows.
We reckoned that wave (ii) ended at 1474. The bounce from 1474 started wave (iii) and should continue above 1557. The wave ii dip happened. However, the price has not broken the top of wave i to confirm the start of wave iii. It has neither dropped below the 1474 support to invalidate this scenario as the new chart below shows.
The chart above shows the Gold Elliott wave analysis October 17 update. Wave i and ii of wave (iii) seem to have completed. This wave count will become valid if the price breaks above 1500. The next target is 1600. On the other hand, if a dip below 1474 happens instead, the bearish correction from 1557 will become more complex.