Gold has hit a strong resistance zone after yesterday's upsurge. Price is currently a bit above 1200. Will price be rejected at this zone or the surge will continue above it?
In late August, second and third week of September-spanning through 5 weeks, Gold formed a very strong resistance zone at 1205-1214. The commodity couldn't continue yesterday's upsurge above 1214 after it hit 1208. Technically, the strong resistance zone could hold price below for a while, followed by a bearish correction to 1190-1195. The one month bearish move from late August to late September looks corrective giving the upper-hand to the bulls. However, for price to advance further, it needs to overcome the 1205-1214 resistance hurdle. The chart below shows the Elliott wave analysis.
Gold technical analysis and Important price levels
The rally from 1160 (16th August) to 1214.5 (28th August) was an impulse wave. It could probably be the first leg of a larger degree bullish zigzag or impulse wave pattern. The correction from 1214 to 1180 is a sign of potential further rallies in the next couple of weeks. The dip from 1214 to 1180 successfully completed a double zigzag corrective pattern and an upsurge followed quickly to 1208 (a resistance zone). The current bullish force will require to break above the 1205-1214 barrier to continue. From 1180, price started a bullish impulse wave expected to be wave C of a larger bullish correction of the 3rd wave of a potential impulse wave from 1160.
Looking closer and taking note of important levels, the current intraday dip should stay above 1194 to sustain and keep hope for a bullish breakout. A dip below 1194 might turn things bearish again. 1194, 1180 and 1160 are the important support and bearish target levels. 1208, 1214 and 1220 are important resistance and bullish target levels.
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