Gold started the new week with a bearish correction toward 1500. The following Gold Elliott wave analysis November 5 update looks at what could happen next from a technical perspective.
October 05, 2019 | AtoZ Markets – Throughout October, the Gold price was not directional. It was pushed back and forth by the upward and downward market forces. A bearish correction from 1557 continued to 1474 and that was all about it. It looks very much likely that the yellow metal will resume the long-term bullish trend toward 1600. From a fundamental view, the geopolitical tensions are starting to come up despite the US and China maintaining trade optimism. The price surged last week toward the 1517-1520 resistance zone. However, a minor pullback toward 1500 is currently appearing. How deep will the current correction go before the immediate bullish push resumes? Will the bears make a come-back to win the short-term battle with a dip to retest the 1481 or 1474 support levels? These are questions traders will ask.
After last week FOMC and NFP from the US, the precious metal has maintained a short-term bullish trajectory. However, the US and China trade deal highlights are back and may cause big moves. Earlier today, Bloomberg reported that China is seeking the roll back of US tariffs on up to $360 billion of its exports to the country. The country expected this to happen before the meeting between the two Presidents. The US is mulling over the idea but there are still uncertainties over whether President Trump will buy this or not. Another talk breakdown will shock the markets and Gold should benefit from it.
Gold Elliott wave analysis November 5 update
Technically, Gold looks bullish. The bearish correction from 1557 ended at 1458 with a clear corrective price pattern. The long-term minor wave 4, therefore, ended at 1458. In the most recent updates, we started counting an impulse wave from wave 5. In the last update, we identified the end of a flat pattern at 1481 with the chart below.
Wave (i) and (ii) of wave 5 ended at 1520 and 1481 respectively. Wave i of (iii) ended just below the 1517-1520 resistance zone. The TradingView chart below shows the Gold Elliott wave analysis November 5 update.
The current dip as the chart above shows is expected to be the wave ii of (iii) of 5. Wave ii could extend to 1495-1500 Fibonacci support zone. If the gold price breaks above 1517 afterwards, we should expect it to advance toward 1600. Only a dip below 1481 will invalidate this scenario.