Gold Elliott wave analysis: price slumps to 1500

London (Sept 26)  Gold slumped to 1500 on Wednesday after making a big break down. The following technical analysis is based on the Elliott wave theory.

September 26, 2019 | AtoZ Markets - The yellow metal made a strong effort to continue the bearish correction from 1557. For over two weeks, the safe-haven commodity made a bullish retracement from 1484 to 1535. However, on Wednesday, it made its biggest single drop in three weeks. Currently, it's having a minor shallow retracement above 1500. The commodity could continue downwards to the 1484 support level. The long-term trend is still bullish but the short term bearish correction might extend to 1451 or 1400.

The commodity market generally is making a bearish move this week. The market took advantage of the attack on Saudi's Oil facilities last week. Oil price gained 12% while Gold also climbed to 1511 and maintained the bullish move to 1535 this week. The story is different this week as the commodities threw away the earlier gains.

The US-China trade situation is also a major concern. Talks are expected to be held in October but the current outlook is not upbeat. If there is a big surprise and an agreement happens, the demand for Gold will drop and so will its price. Until then, Gold is expected to be driven by the broad market sentiments and economic events especially in the US

Gold analysis: important price levels

Resistance Levels: With the current dip, 1535 and 1557 are the main resistance levels. If breached, we should see 1600 hit quickly

Support Levels: 1500 was hit yesterday. 1480 and 1451 are the most significant support levels between 1400 and 1500 psychological levels.

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