Gold hits back at 1230 resistance after more than a week spent trading below it. Will the bullish run from 1196 continue? The following give insights based on Elliott wave theory.
December 03, 2018 | AtoZ Markets - Gold has regained positive traction at the start of this week and has climbed to retest 1230 resistance level. The US dollar started this week weak across the board on the news that the US and China have agreed on trade tariff for at least 90 days. This fall of the dollar has been seen as one of the major factors driving the yellow commodity higher this week. Above 1230, there are 1237 and 1243 resistance levels that are keys to the bullish run. It is yet unclear whether the bullish run will break above these levels or run out of steam to drop back below 1210 support as the Fed look to hike rate this month. The US ISM manufacturing data is the major highlight in today's economic releases.
After price broke out of the corrective drop to 1210, it quickly broke upside last week. 1227-1228 which was last week resistance zone was broken upside this week as price hits above 1230 resistance. From the long term degree, a break above 1243 will see Gold aiming 1360 in the coming weeks. If price holds below 1243 and breaks below 1200, we will most likely see the year-long bearish trend continue below 1150.
Gold Elliott Wave Analysis and Important Price Levels
In the last update, we noted the drop from 1230 to 1211 completed a double zigzag pattern. After the breakout, a dip was expected below 1230 before an eventual breakout to continue the bullish run. The chart below was used.
Price did exactly as expected with a dip to 1216 as the chart below shows. From 1211, a bullish breakout to 1248-1250 is very possible in the coming days.
The break above 1230 shows price commitment to the upside. Further rallies to 1250 is expected. if this happens, the long term bearish scenario would be invalid and price might continue to 1360 in the coming weeks. This bullish scenario will be invalid if price drops fast below 1211. 1216 and 1211 are the nearest support levels and price should stay above them if the bull run will continue to 1250.
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