After spiking to 1318 on Wednesday, Gold has continued swiftly downside to continue the bearish correction. The following looks at what could happen next based on Elliott wave theory.
February 14, 2019 | AtoZ Markets –Gold has been on a bearish run this month. However the dip is corrective but the yellow market could still favor the bullish trend at the end of the correction. After running for about two weeks, the correction might be getting close to its terminus. Yesterday, Gold started around 1310 after bouncing from 1302 in the previous days. It drove quickly upside to hit above 1315 but didn’t stay up there. At 1318, price dropped sharply to 1304. However, today, from 1304 price rallied slightly to 1309 before dropping to the current level at 1305-1306. A dip below 1300 is still very much likely as the bearish correction gets on the way for its last leg.
From Elliott wave perspective, the short term forecast is still corrective while the general trend is still bullish. The current dip from 1326, as we have shown in the previous updates, is developing to complete the 4th wave of the impulse wave trend that started many months ago from 1160. This 4th wave was expected to run to 1298-1277 price territory. Meanwhile the last update, with two scenario, looked at price activities more closely. What has changed since then?
Gold Elliott wave Analysis and Important Price Levels
The two scenarios have same interpretation but little difference in their pattern make-up. They both expected a double zigzag pattern below 1300. With yesterday’s spike above 1315, the second scenario is more likely to happen. The chart below was used for the second scenario
A dip to 1295 was expected to complete a double zigzag dip from 1326. However, price spiked above 1315 to alter the position of wave (x) as the chart below shows.
Price is at the verge of dropping below 1300 with this current formation. A slight rally to 1310 might happen before this. Only a very strong bullish force would drive Gold above 1318. The trend is still bullish but a dip below 1300 will most likely happen before price continues upside.
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