Gold Elliott wave analysis: price remains upbeat ahead of NFP

Gold rose for three days in a row to breach 1500. Ahead of the NFP, the following Gold Elliott wave analysis looks at the most likely scenarios.

October 04, 2019 | AtoZ Markets – The increase in demand for risk-off assets has set the yellow metal on high in October. The dollar-denominated commodity has started the last quarter of the year in a bullish mood. After it bounced off a major critical support zone on Monday, it rallied for the next three days to hit 1520 and therefore recorded a 4% gain. However, a fast dip to 1505 quickly followed. At the time of writing, Gold exchanges for $1,509 and is set to end the week positive unless it gets plundered by the NFP data coming later today.

Gold has had a very buoyant week so far. All eyes will now be on the critical Non-Farm Payrolls. The recent manufacturing data from the US labor department has been slowing down while private and small-business hirings have also dropped. However, economists have come to a consensus of 145k new jobs for the last month while the employment rate is expected to stay at 3.7%. In contrast, the ADP Non-Farm employment data and the ISM manufacturing PMI data released on Wednesday and Thursday respectively came worse than expected.

If the NFP also come out worse by 50k or more while the employment data remains at 3.7%, we should see the Gold price rally above the 1535 intraday resistance level toward 1557 top. A better than expected data by 50k or more should lead to a fast dip to 1484 support level. If the employment rate changes, we would see price reacts more to it. A negative change will lower USD price and set Gold upside while a positive change will cause a fast dip

Gold analysis: important price levels

Resistance Levels: 1535, 1557, 1600 and 1800. 

Support Levels: 1484, 1460-1451 and 1400.

Gold Elliott wave analysis

From the Elliott wave perspective, the bullish trend has a higher chance of continuation especially with the manner the bounce off the 1463-1451 support zone has moved. In the last update, we started a bullish impulse wave breakout from 1463 with the chart below.

The price drifted higher to 1520 with minor dips. It seems wave (i) is completing at 1520 as the new chart below shows.

If wave (i) has ended at 1520, we should see wave (ii) dip continue to 1484-1490 support zone. Wave (iii) should present another opportunity for the bulls to push above 1557 top. It will be good to wait for the market to digest the NFP data to see how we go from here. 

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