The price of Gold seems to be unimpressed by fears about the coronavirus spread, mainly due to the technical sideways sequence observed in the short-term.
From the Elliott Wave Theory, Gold in its log-scale weekly chart shows a bullish sequence that began in December 2015, when the price of yellow metal found a bottom at $1,046.45 per ounce.
The long-term structure shows the market action advancing in a Wave (3) of intermediate degree, labeled in blue, that peaked at $1,611.48 per ounce in early January 2020. After this impulsive upward movement, the price has remained in a sideways range to date.
An alternative count for the precious metal indicates the possibility that instead of it corresponding to an impulsive wave, the current movement could be an Intermediate Degree wave (C) in blue. This scenario would imply that the price of yellow metal could develop a new bearish leg.
The following figure shows Gold in its daily temporality. On this chart, we observe that the price advances in an intermediate degree Wave (3), which, in turn, shows the wave 5 of a minor degree in green in progress.
The current bullish cycle remains intact since August 16, 2018, when the yellow metal found fresh buyers at $1,177.22 per ounce. As long as the precious metal remains above $1,446.60, the long-term trend will continue on the bullish side.
The next figure displays the yellow metal in its 4-hour timeframe. On the chart, we distinguish the price action running in the wave 4 of minute degree labeled in black.
As commented in a previous article, after the rally developed by Gold during December 2019 and ended in early January 2020, it was highly feasible that the price action began an extended sideways correction, likely as a triangle pattern or maybe a complex structure.
In the short-term, as long as Gold remains above $1,516.75 per ounce, our preferred market positioning on this asset will be in the long-side.
In conclusion, short-term Gold continues moving in a sideways path bounded by the February 03 top, at $1,592.16 per ounce. However, from a long-term perspective, the incomplete upward sequence suggests the possibility of a new upside in the precious metal, which could drive Gold to produce new highs above the $1,600 per ounce.
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