Gold dropped to 1212 after series of price reversal patterns were completed on the intraday chart. Will price dig further below 1200 or continue the bullish resurgence? The following give insights based on Elliott wave theory.
After completing a zigzag pattern last week at 1230, Gold continued the bearish move to 1212 after completing a head and shoulder pattern. Price has now entered 1216-1207 intraday support zone and might drop below or bounce off it to continue the bullish move from 1190. Despite yesterday's bearish breakout, Gold started today with no assured direction yet. Price currently oscillates between 1215 and 1212. If the drop will continue, we will see a break below 1212 to 1210 and lower.
From the long term Gold Elliott wave analysis we have been looking at, there are still two very likely scenarios. The bullish scenario would be triggered if price surges above 1243 resistance level. On the downside, a drop below 1200 will support the continuation of the year-long bearish trend with support levels below 1150 as targets. From a short term frame, the next direction is not very clear yet as price is still developing. Let's have some ideas of the most likely scenarios.
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Gold Elliott Wave Analysis and Important Price Levels
The chart above shows two scenarios with important price levels to validate or invalidate them. The bullish scenario (in green) assumes a double zigzag pattern from 1230 has completed at 1212. A break above the blue channel line could be a real bullish trigger that might send price back upside above 1230. On the downside, if price remains within the blue channel, the bearish potentials to 1200 is still very high with the emergence of an impulse wave. A break below 1212 should see price retesting 1200 support. A 3-wave bullish pullback could happen at 1200 but price needs to break below 1200 and 1196 to put the bears back in a much bigger advantage.
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