Gold slumped below 1500 on Monday as the bull-bear battle intensifies. The following Gold Elliott wave analysis October 28 update looks at what could happen next.
October 28, 2019 | AtoZ Markets – The yellow metal ended bullish last week. It surged above 1500 after staying in a sideways range below the level for three weeks. On Friday, it hit 1518, a strong intraday resistance level. However, resurgence didn’t last as the price fell sharply to 1500. This week, the bearish move has continued as the metal declined to 1490. Below 1490, there are support levels at 1474 and 1458 where the bulls will wait and give it another try. On a larger scale, the bearish correction from 1557 is still intact although the long term trend remains bullish.
Since the US-China agreed on an initial deal, the demand for the yellow metal has dropped a bit. Risk appetite has increased as uncertainties seem to be much lower compared to what we had in the first three quarters of the year. Global GDP is also expected to be on the rise. Therefore, the Gold price might plummet further. However, technically, a different picture is painted on the charts. Since the bounce off 1458 to 1520, the Gold price has been corrective. Unless a dip below 1458 happens, the long-term bullish trend might resume for the final leg. This is quite logical. In spite of the fact that investors are more upbeat than the first half of the year, anything can still happen in the geopolitical scene to change the mood of the market. In the short term, the market will focus on the FOMC and the US employment data coming later in the week.
Gold Elliott wave analysis October 28 update
In the last update, after the price rallied from 1474, we identified a triangle pattern and expected a break below its neckline to confirm lower dips. However, the breakout happened upside. The chart below shows the new update and what we expect to happen next from the Elliott wave perspective.
The chart above shows the Gold Elliott wave analysis October 28 update. The long term minor wave 4 has probably ended at 1458 in late September. Wave 5 started after completing its first sub-wave at 1520. We thought wave (ii) of 5 had ended at 1474. However, with price reluctant to shoot above 1520, we will have to assume it’s taking more time and more complex shape. Our focus will now be on the possibility of wave (ii) ending with a regular flat pattern at 1470-1474 or slightly higher. If the price is contained at this zone and then bounces above 1490, wave (iii) of 5 should hit above 1557. The dip from 1520 still looks corrective. Therefore, we can’t say the bulls have given up just yet.