Gold price returns above 1500 after a minor dip below it. The following looks at what could happen next based on the Elliott wave theory.
August 12, 2019 | AtoZ Markets – The yellow metal continues to gain more ground. It hit above 1500 last week. However, last week closed with the price slightly below 1500. Pice dipped further to 1487 early in today’s London session. The breakdown in talks between US and China is pushing the demands for Gold higher as the top safe-haven commodity breaks new high levels.
The Gold price has quickly returned above 1500 today just before the New York session. It seems Gold will climb higher toward 1500 or maybe even hit the 1600 handle. The market will look forward to the development in the trade talks and the important USD economic events that will be released later in the week.
Gold analysis: important price levels
The trend is bullish. If a break above 1510 happens, the trend is expected to continue toward 1550 and perhaps the 1600 handle. To the downside, a dip below the 1487 intraday support will lead to a deeper correction to 1475 or 1450.
Gold Elliott wave analysis
Despite the fundamental bullish sentiments, Gold technically is close to a diagonal reversal zone. The current bullish leg started in August 2018 and is very close to completing an impulse wave. According to the Elliott wave theory, very often when this pattern completes, a 3-wave correction happens in the other direction. In this case, Gold is probably close to starting a bearish correction. However, the current price formation has not signalled the correction to have started. It seems the current sideways move around 1500 will precede the last leg of this upsurge. In the last update, we highlighted the possible patterns that the current dip might complete before returning northward. The chart below was used in the last update.
Price has advanced to the 1500-1550 zone as expected. Whether this zone will hold or price will breach it, remains to be seen. However, it seems price will go higher to 1550 and higher toward 1600.
The last leg which is expected to be an impulse wave is not yet complete as the new chart above shows.