Gold Elliott wave analysis: price retreats toward 1280

Gold retreats close to 1280 after an impressive upsurge from 1265. The following technical insight is based on the Elliott wave theory.

April 30, 2019 | AtoZ Markets – XAUUSD is dropping from 1288 but still holds its head above 1280. That might soon end as the 1260 bearish target beckons. On Monday, the yellow metal dropped to 1280 as the US treasury yields rally kept demands short. However, after the US GDP report on Friday, the buck is coming under bearish pressure. The dollar-denominated commodity thereafter was lifted again to 1285 but the momentum couldn’t get it entered into the 1300 psychological level.

The CB consumer Confidence data released today came better than expected. The precious metal is now pointing toward 1280 support level. A bridge below could see it lower to the 1260 bearish price target. For the rest of the day, XAUUSD price is expected to be driven by the broader market sentiments because it enters into a cautionary mood tomorrow ahead of the FOMC meeting. If the USD weakness continues afterwards, Gold should be lifted above 1300. Meanwhile from a technical perspective, the price could dip further to 1260 to complete a technical reversal pattern before finally turning upside for the long haul.

Gold Elliott wave analysis and important price levels

The price is still printing the 4th wave dip of the multi-months bullish impulse wave from 1160. The 4th wave was expected to end at 1260 or even lower at 1240. The 4th wave has completed the first two legs and the last leg was expected to complete an impulse wave or an ending diagonal pattern. The ending diagonal looked stretched with the 3rd sub-wave almost as long as the 1st wave. The impulse wave was settled for as the chart below (used in the last update) shows.

The retest of 1280 was expected. It did happen but the price went too high to violate the impulse wave (c). We have to go back to the ending diagonal and it seems further dip to 1260 will happen as the chart below suggests.

Wave 1(circled) is almost equal to wave 2 (circled) which has not violated the ending diagonal rule. The 5th wave could extend to 1260 if price confirms the end of the 4th wave at 1299. Meanwhile, the 4th wave still has more rooms up to 1290. A break above 1290 will invalidate this setup and probably set the bulls loose. If the price stays below 1290, a dip to 1260 would complete the diagonal and the 4th wave of the long term bullish impulse wave trend. A huge rally toward 1400 could follow afterwards.

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