The Gold price backtracked on Tuesday after a volatile session driven by coronavirus worries and its impact on the global economy, which encouraged Gold's visit of the 2013's highs, at $1,683.38 per ounce.
From the Elliott wave perspective, Gold, in its 2-day chart, displays the advances of the precious metal in a wave (3) of Intermediate degree labeled in blue. This sequence began in August 2018 when the price found buyers at $1,160.32 per ounce.
At the same time, the internal sequence of this bullish impulsive move in progress reveals that Gold advances in its fifth wave of Minor degree tagged in green, which started in the past October 2019 when price found support at $1,445.78 per ounce.
The next figure illustrates the yellow metal in its 12-hour timeframe. On that chart, we observe that price moves in its fifth wave of Minute degree labeled in black.
In the chart, we observe that the bias remains bullish. At the same time, the price action continues advancing above the invalidation level, settled at $1,547.57, which corresponds to the end of the fourth wave of Minor degree in black.
Gold, in its 4-hour chart, shows the price action starting the fourth wave of Minuette degree labeled in blue.
On the other hand, we observe that the third wave on the Minuette degree is an extended wave.
According to the Elliott wave theory, in an impulsive movement, there is only one extended wave; this rule makes us suspect that a new advance in a fifth wave shouldn't be extended. Therefore, the price could find resistance at the psychological level of $1,700 per ounce.
In conclusion, our preferred bias remains in the long side as long as Gold continues moving above $1,547.47 per ounce.
On the other hand, the possible next path that can develop the yellow metal is the completion of the fourth wave of Minuette degree in blue, which could provide a long-entry to profit from Gold's advancement to a new yearly high.
Elliott Wave Summary
Risk Warning: CFD and Spot Forex trading both come with a high degree of risk. You must be prepared to sustain a total loss of any funds deposited with us, as well as any additional losses, charges, or other costs we incur in recovering any payment from you. Given the possibility of losing more than your entire investment, speculation in certain investments should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well-being. Before deciding to trade the products offered by us, you should carefully consider your objectives, financial situation, needs and level of experience. You should also be aware of all the risks associated with trading on margin.
Recommended Content
Editors’ Picks
EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap
SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.