Gold is retracing back to 1290 after a fast drop below 1280. Will price continue downside afterwards? The following give insights based on Elliott wave theory.
January 07, 2019 | AtoZ Markets - Gold has continued the upside move from 1196 and it seems the yellow metal will continue up to 1370 in the coming weeks. A bullish impulse wave from 1160 seems to be surfacing. From the long term perspective, price is completing the 2nd leg of a bullish correction which might continue to 1500. This 2nd leg however, might have completed with a flat pattern at 1160 and eventually be followed by a bullish breakout to 1500. Alternatively, the 2nd leg could be a triangle pattern which will still require a big dip to 1200 after the current bullish run hits 1360.
From the hourly look, the chart below was used in the last update to show the possibility of a bullish impulse wave from 1160.
We expected price to drop from 1288-1300 to 1265-1256 zone. The expected dip was meant for the 4th sub-wave of the 3rd internal wave of wave (iii). After the dip, price should rally above 1300 to complete the 5th sub-wave of this degree. Price dropped as expected, just below 1300, to quickly hit 1277. It however, quickly picked up with a retracement to 1290 as the chart below shows. What next?
Gold Elliott Wave Analysis and Important Price Levels
Price might take one more leg downside below 1277 to complete wave iv before it resumes upside. The bullish trend will persist until price breaks below 1150 support. If the impulse wave completes as expected, we might see a deep bearish correction back to 1250-1260. The long term bullish forecast remains at 1360-70. Above this level, price might continue to 1500 in the coming week. The two most significant swing support levels are 1250 and 1196 before 1160.
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