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Technical analysis

Gold Elliott Wave Analysis: The Bullish Run Might Approach 1260

Sanmi Adeagbo | Dec. 18, 2018
Gold Elliott Wave Analysis: The Bullish Run Might Approach 1260

Gold has continued upside on Monday after last week's dip to 1232. It seems price would hit 1262-1265 technical zone. The following analysis is based on Elliott wave theory.

December 18, 2018 | AtoZ Markets - Gold has continued the bullish run from 1196 as part of the long term bullish correction. Price has progressed from 1211 in late November to hit its highest since July. After breaking above its previous high of 1243-44, the next targets were 1250 and 1260. Last week, price dropped to 1232 from 1250 but now looks like breaking above 1250 on its way to hit higher prices. The short-term forecast is bullish but the medium term forecast points downside. The current upsurge started in August from 1160 and has led to about 7.7% gain for the yellow metal.

From technical angle, the rally from 1160 is corrective - a corrective 4th wave of the year-long bearish impulse wave. The exact pattern price is completing a complex zigzag - a triple zigzag pattern. Often times, a double zigzag gets morphed into a triple zigzag. This means that the bears might still be bidding their time to get back just when the bullish momentum gets exhausted. In the previous updates, we have marked 1262-1265 as a possible price zone for the corrective triple zigzag pattern to complete. In the last update after price dropped to 1232, we expected a further advancement above 1250 into the 1262-1265 zone. The chart below shows the new update.

Gold Elliott Wave Analysis and Important Price Levels

The chart above shows price breaking above the 1250-1230 falling channel. Above 1250, price should head to 1262-1265 as earlier expected. Unless a dip below 1230 happens suddenly, price should hit the bullish target. Sellers will look for bearish clues at the zone as it's a strong resistance zone of interest. If however, price bridges the level easily and goes above 1270, the bullish move might just continue to 1360 to continue a long term triangle pattern as explained in the alternative long term forecast.

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Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.