Gold dropped further after failing to build on early gains. The following Gold Elliott wave analysis November 11 update looks at what could happen next.
November 11, 2019 | AtoZ Markets – The demand for risk-off assets has been on the downside in the last 4 weeks. Gold couldn’t build on the early October gains to 1520. The price tested levels close to 1520 three times and afterwards confined in a wide triangle range. Eventually, the downside pressure prevailed and the yellow metal plummeted below 1474 and 1458 levels to hit 1451. Although currently, the price is recovering above 1451 support level, chances are high that the bears will surrender again. However, the bearish run from 1557 (since September 4) still looks corrective. Therefore, the long-term bullish trend shouldn’t be written off totally.
Investors’ risk appetites have increased. Major geopolitical tensions are getting resolved. The US-China trade talks which has been the major risk trigger is looking good. The two world’s largest economies have come to the table and might finally complete the first phase of the trade deal. UK Brexit has also completed the first phase after negotiating a deal with the EU. Global GDP is getting a boost. Stock prices are on the rise. As a result, the demands for Gold and other risk-off assets have lowered. Gold has, therefore, hit its lowest price since August 2. However, the long-term trend is still bullish.
Gold Elliott wave analysis November 11 update
Technically, Gold price from 1557 looks corrective. From the long term Elliott wave perspective, the dip is most probably the minor 4th wave of the long term emerging bullish impulse wave. If this is the case, Gold will most likely dip lower to 1420 or slightly above before the bulls will have another chance to win back.
In the last update, after the price dropped from 1515 to 1485, we expected a triangle pattern. However, that was premature because the price only completed 3-subwaves. We also noted that if the price breaks below the lower line of the boundary, it should decline to or below 1451 support level. This is currently the case. The chart below shows an updated outlook identifying the dip from 1557 as a zigzag pattern (All chart from TradingView)
The first leg ended at 1484 before the price pushed upside. Meanwhile, the second leg completed a triangle pattern at 1517 with the highest and lowest levels at 1535 and 1484 respectively. The last leg dragged the price lower -close to the 100% Fibonacci extension at 1443. At 1420-1443, we have a strong support zone. If the price pushes to 1480 from the zone, we might see the long term bullish trend resume. However, a lot will depend on the progress of the US-China trade talks and other fundamental events in the coming weeks.