Gold is heading to its lowest price since July as reports of vaccines boosted market moods. The following November 11 Gold Elliott wave analysis share some technical insights.
November 11, 2020 / AtoZ Markets – The demand for safe-haven assets fell on Monday following reports that Pfizer vaccines have been confirmed to be 90% effective to prevent Covid-19. The virus shut down global economies in the first quarter of the year. Although there have been recoveries in the second and third quarters, the second wave of the virus has become a major concern for global leaders. As a result, further recovery was doubtful. The demand for Gold skyrocketed as it quickly became the most preferred safe-haven for investors during the first wave of the pandemic. However, the yellow metal has fallen over 11% since it topped from its all-time high in August.
Meanwhile, since October, the commodity dropped its safe-haven and moved with stocks until after the election. However, vaccine optimism on Wednesday improved investors’ risk appetite and caused a massive decline in Gold and other risk-off instruments. The commodity dropped 5.6% (over $100) to retest the 1850 support level. On Tuesday and Wednesday, volatility dropped and thus, the metal bounced to 1880. Further bullish correction toward 1900-1920 is very much likely before the precious metal falls further to 1800 or even below. Below 1850, there are other support levels including 1800 and 1722.
November 11 Gold Elliott wave analysis
From the long term perspective, Gold is exhibiting the perfect structure of a bullish impulse wave. As the weekly chart below shows, Gold almost doubled its price since the December 2015 bottom.
The bullish impulse wave from 1050 is not yet complete. In fact, intermediate wave (3) is in the 4th sub-wave. Wave 4 of (3) could drop further to the 38.3% Fibonacci retracement level at 1722 or at least the 1800 psychological support level. Afterward, Gold should surge further to 2200 for wave (3) and even much higher for wave (5) if the price moves along this path. Therefore, our major concern is wave 4 which is currently emerging into a double zigzag pattern as the chart below shows.
Wave (X) ended at 1966. Wave (Y) could complete a double zigzag pattern as well. This is the reason why we might see another corrective rally upside before wave (Y) of 4 ends at 1800 or even below.