Gold returns bearish, heading to 1300. It seems price will eventually drop below 1300 before resuming upside. The following give insights based on Elliott wave theory.
February 11, 2019 | AtoZ Markets – After making its way to 1315 last week, the big commodity has returned downside today. The next intraday support stand at 1302 and currently at 1305, price is not far away. A dip below 1300 handle is highly likely. Gold has dropped close more than 100 Pips today as Dollar gains marginally. The US-China trade talks have resumed and investors are wary of what the outcome will be. The yellow metal, which is heavily denominated by the Dollar will be influenced by the market performance of the most traded currency in the world.
From Elliott wave perspective, Gold was expected to drop further despite last week rally. Late January, after we spotted a top at 1326, we expected a 3-wave correction downside to complete the 4th wave of the impulse wave rally that started at 1160. Price did drop as expected, but last week dip to 1302 was shallow for a 4th wave of that degree despite the completion of a zigzag pattern. Often times, when ‘zigzag’ dip looks too shallow, a double or triple zigzag becomes the next expectation. It seems that is happening on Gold presently as price prepares for a dig below 1300.
Gold Elliott Wave Analysis and Important Levels
In the last update, when price was heading to 1317 intraday top, we called for a possible double zigzag dip below 1300. This means that 1317 has a high likelihood of holding price below it. The chart below was used.
Price is playing out exactly as expected. A rally close to 1317 and a dip toward 1302, as the chart below shows.
The chart above shows the current position of Gold in the current bearish correction, marking the 4th wave of the impulse wave rally from 1160. A double zigzag down to 1298-1277 territory of the 4th sub-wave of wave (iii), is highly likely. The next barrier is 1302 and 1300-1294 support zone. Once price dips below these levels, it should drop further into the territory. Unless a fast rally happens above 1317, the bears are still in control. However, it’s good to know that the trend is still bullish.
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