Gold Price Analysis: Elliott Wave projections indicate a target near $1700 at least is on the cards
|- Gold trades 2.16% higher despite the risk-on tone in equities on Monday.
- The previous wave high of USD 1644.54 has now been broken indicating a move higher.
Fundamental backdrop
The easter weeks has started with a risk-on feel. Equities indices in Asia closed higher and at the moment European and US bourses are positive. There has been a slowdown in the death rate in Spain and Italy but the US and New York, in particular, are still now out the woods yet. New York state officials stated, "recent data suggests we are at the apex or near the apex at the moment" pretty bullish words at an early stage from the NY state official.
The big issue in the US economy could be housing. In the US jobless claims are on the rise and employment looks like it will be hit hard. This means that we are far from the peak of the economic impact of this pandemic even if the health officials are calling a top.
This is one of the main reasons the market may be bullish on gold. It is very hard to estimate the impact of store closures and reductions in productivity in such a short space of time.
Technical picture
The chart below follows on from last weeks (Click Here). The previous wave of USD 1644.54 has now been taken out to the upside. This area could be a support zone if the price pulls back, which often happens. Away from this, the Fibonacci projections are showing some decent upside targets for the patient bulls. The 138.2% is holding at USD 1676.45 and the 161.8% is closer to the USD 1700 level at USD 1695.00. If this scenario does transpire that would complete a 5 wave pattern on the 4-hour timeframe and there could be a 3 wave pullback before a potential assault on USD 2000. This, of course, all depends on the deterioration of the US economy following the COVID-19 pandemic.
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Additional levels
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