Gold has broken down again following optimistic trade remarks from China. The following include Gold Elliott wave analysis November 7 update.
November 7, 2019 | AtoZ Markets – The yellow metal broke down on Tuesday. It hit below the 1481 support but still holds above 1474. The metal has been in a wide range since the October 1-3 surge. Last week, it surged to 1516 from 1481 as a result of doubts concerning the US-China trade deal. However, the two parties remain strong in their convictions that the first phase of the deal will go through. The market fell sharply to 1479 as a result. There was a minor recovery to 1494 on Wednesday. Meanwhile, in the latest reports from China, the country’s commerce ministry has expressed optimism. Gold price, as a result, fell sharply and currently trades at $1,485 per ounce.
Gold is looking more difficult for swing trend traders as the price has remained in a range for over 4 weeks. However, short-term speculators who trade reversals will find this good. The bearish correction from 1520 is becoming overstretched. 1517-1520 remains the resistance level to beat before the bullish trend will resume. On the other hand, 1474 and 1458 are the next target levels before the 1400 handle.
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Gold Elliott wave analysis November 7 update
From the Elliott wave perspective, we identified the dip from 1520 as a correction of the October 1-3 rally. However, the correction is taking far more time than necessary. In the last update, we identified a flat pattern ending wave (ii) at 1481 as the chart below shows (All charts used are from TradingView).
With the chart above, we started counting wave (iii) from 1481. Wave i of (iii) ended just below 1517 and wave ii was expected to end between 1495-1500 or perhaps lower. However, wave ii dip must stay significantly above 1481 to validate this scenario. A bullish run should then follow above 1520. Eventually, the dip that followed was very sharp and the price slumped below 1481 to invalidate this scenario. The new chart below shows the Gold Elliott wave analysis November 7 update.
The 400 pips range could continue if 1479 is not broken downside. A triangle pattern could complete eventually. However, this is a bit premature until wave d is established. We will have to see how the price reacts at the end of this week to know what next to look forward to.