Gold completed a bearish triangle pattern below 1500. A bearish run toward 1451 is now very likely. The following Gold Elliott wave analysis October 24 update shows what could happen next.
October 24, 2019 | AtoZ Markets – The yellow metal rallied from 1481 on Tuesday to hit 1496 on Wednesday. Since October 11, the metal has been range-bound between 1498 and 1475. Eventually, a triangle pattern completed at 1495. The price is already reacting with a drop to 1490 early in the London session on Thursday. The large bearish correction from 1557 might just continue below 1458.
There are not many high-impact events on the economic calendar this week that could move the Gold price. However, the market is still wary of geopolitical tensions. Gold often rides on these uncertainties as we have seen since the US-China trade war started. It’s not surprising that its price is now going down as the demand for the yellow metal falls. The future of Brexit is becoming clearer while the US-China trade talk has progressed. Investors are becoming more confident and thus betting on improving global growth. Money is expected to flow more into ‘risk-on’ assets as risk appetite rises. Gold will most likely continue to drop. Furthermore, the market will look forward to how Central Banks react to the latest development.
For some weeks, Gold has stayed below 1500 handle. Although there were attempts to break upside, there wasn’t enough momentum to make it happen. The longer this battle continues, the more the likelihood of a bearish break below the 1474 and 1458 support levels. If the bullish recovery from 1458 will continue, the price will have to break above 1500.
Gold Elliott wave analysis October 24 update
In the last update, we looked at two scenarios. The second scenario is currently playing out. We anticipated a triangle pattern to complete at 1496 or below. We used the chart below.
Price has played out as expected. It dropped from 1496 to 1490 as the new chart below shows. Unless a massive break above 1496 happens, the bearish correction from 1557 will continue below 1458.
The chart above shows the Gold Elliott wave analysis October 24 update. If the price drop to 1480, a minor pullback might happen before it continues downside. Targets are at 1474, 1458 and 1451 support levels. At the moment, the move is slow. This forecast will become invalid if the Gold price hits above 1496.