Gold has returned to 1500 after dropping fast below 1490. The following looks at what could happen next based on the Elliott wave theory.
September 16, 2019 | AtoZ Markets – The yellow metal was not directional in its approach last week but neither did it lack significant volatility. After being rejected to drop below 1485, it was also being resisted against further rallies at 1525. The precious commodity then dropped to retest the 1485 support level before the week ended. Meanwhile, this week has been bullish so far. With the Oil price surging very quickly following some attack on Saudi installations, the yellow metal quickly opened the week with a surge to 1511 in the Asian session. However, it has remained a bit silent with a dip to prices closely around 1500 as the London market kicks off.
Crude Oil price jumped by nearly 20% after an attack on Saudi Oil facility knocked down its production by nearly 50%. CAD and other ‘Oil currencies’ quickly gained. Gold also spiked as a safe-haven asset. The US Treasury yields, on the other hand, dropped after a significant recovery last week. There are new fears that the US might sanction the EU with higher tariffs and of course the FOMC this week is a major market highlight. It’s going to be another big week for the market. It now remained to be seen whether Gold will resume the long-term bullish trend or continue the current bearish correction.
Gold analysis: important price levels
Resistance Levels: 1523 and 1557 are the major barriers before the 1600 handle. If the bullish trend resumes with a massive break above 1557, the chances of hitting 1600 afterwards are very high.
Support Levels: 1485 and 1451 are the major levels before the 1400 handle. A bull-bear battle currently happens around 1500. If the price breaks below 1485, then their is a big chance that 1451 and 1400 will be hit depending on the bearish momentum.
Gold Elliott wave analysis
In the previous updates, we have been maintaining a short-term bearish correction from 1557 toward 1400.
In the last update, as shown in the chart above, we expected a bullish correction to 1520-1540 price zone before the bearish correction continues. The new chart below shows price moving according to this forecast which still favours deeper correction.
One more test of the 1520-1540 might happen before the price continues downside. If a break below 1480 happens, Gold price is expected to hit 1400. There are high impact events coming this week. If the current recovery goes higher above 1540, the bulls could regain control and push to the 1600 target.