Gold Elliott wave analysis October 22 update

Gold has stayed below 1500 for nearly two weeks. The yellow metal is close to completing a triangle pattern. The following Gold Elliott wave analysis October 22 update looks at the technical side.

October 22, 2019 | AtoZ Markets – The precious metal is range-bound between 1498 and 1474. If the price is further resisted below 1498 resistance, there is a high likelihood that the bearish correction from 1557 will continue below 1458. The US-China trade relationship still remains the major driver. Although USD has slumped against the major currencies last week, the dollar-denominated commodity did not show any sign of trending – to continue the smaller bearish correction or resume the larger bullish trend. After the trade agreement in Washington, Gold had a decent fall but that’s all to it. The atmosphere of uncertainties is still around despite the two parties showing optimisms. After the meeting on October 10/11, the metal fought back from 1474 to 1498 before losing bullish momentum.

Technically, from a long-term perspective, we expected Gold to resume the long-term bullish trend. The bearish run from 1557 to 1458 completed a zigzag pattern. The metal pushed to 1520 afterwards. In addition, the more recent dip from 1520 to 1474 was also corrective. In the last update, we expected a surge above 1498 to confirm the resumption of the bullish trend. However, the metal went sideways.

The forecast in the last update is still valid. A break above 1498-1500 zone will most likely lead to further rallies to the 1520, 1537 and 1557 resistance levels. On the other hand, if the sideways move continues below 1498 and eventually break below 1474, the bearish correction should continue. The metal is expected to plunge below 1458 support level down to 1451 and possibly to the 1400  handle.

Gold Elliott wave analysis October 22 update

In the last update, we used the chart below.

We identified the possible end of wave (ii) at 1474. Wave i-ii of (iii) followed afterwards. However, wave iii of (iii) will be confirmed by the break above wave i high at 1498. The charts below show a breakout didn’t happen and the correction from 1498 became more complex. The Gold Elliott wave analysis October 21 below shows the two most probable scenarios.

1st Scenario

Gold Elliott wave analysis October 22

Gold H1 Chart (Trading View)

The chart above supports the initial scenario we had in the last update. Wave iii of (iii) should shoot above 1500. By projection, wave (iii) should hit 1572 – above the 1557 resistance. If this scenario plays out, Gold should hit the 1600 handle as the impulse wave from 1458 extends.

2nd Scenario

Gold Elliott wave analysis October 22

Gold 15 Mins (Trading View)

If the price fails to break upside, the second scenario as shown in the chart above should play out. A triangle pattern with wave e ending at 1496 or below. If the price remains within the triangle range and breaks below 1400 afterwards, the bearish correction from 1557 should extend to 1451 or below.

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