November 16 Gold Elliott wave analysis

Gold followed a sharp dip with an equally sharp rally shortly after Moderna vaccine reports. The following November 16 Gold Elliott wave analysis shares some technical insights.

November 16, 2020 / AtoZ Markets -The yellow metal fell sharply on Monday after Moderna reported that its Covid 19 vaccine is 94% efficient. Risk aversion quickly forced equities to higher levels. However, Gold and other risk-off instruments fell sharply. This is reminiscent of last week’s Pfizer report, also on Monday, which caused a sharp $100 decline in the price of the metal. However, just as we saw last week, prices are recovering from the down-spike albeit at faster speed and momentum. Gold dropped $30 from 1893 to 1863 in just 15 minutes. Meanwhile, much of that has been recovered as the dollar-denominated commodity bounced to 1890.

Vaccines hope is providing good support for the market in the face of many challenges. First was the second wave of Covid19 reaching new highs and forcing larger lockdowns. Second was uncertainty concerning the US politics with President Trump not yet accepting defeat in good faith. The third was when and how much new stimulus will be. The RBA led the way last week with fresh supports. Without the vaccines providing optimism, risk-off Gold should have surged above 1900 to 1930. However, with investors playing their cards with little risk restrictions, knowing that the effect of Covid this time around won’t be as devastating as earlier feared, risk-off is well capped. Gold will most likely mount back above 1900 as vaccines reports only seem to provide short-term spikes.

Going forward, we would see more companies coming out with their vaccines. However, consecutive effects will continue to shrink until they pass clinical trials. Gold might fall further especially if US President-elect restrain from enforcing lockdown as his transition team stated earlier in the week. With hopes of further stimulus, the demand for safe-havens will drop further and Gold could hit 1800 bottom. Technically, this looks very much likely.

November 16 Gold Elliott wave analysis

After the 2075 high in early August, gold has started a large double zigzag bearish correction. Technical price projection tools project the corrective phase to endure to 1800 at least. In the last update, we used the chart below.

Wave (X) ended at 1966 and then followed was a big $100 crash as a result of the Pfizer vaccines report. It was a trigger but the outlook has always been bearish from that top. The chart above shows that we expected the bullish correction to go further upside as part of Wave (Y) which is should also be a zigzag structure. In the end, one more crash down to 1800 should happen as the new chart below shows.


November 16 Gold Elliott wave analysis

Chart from TradingView

The current bullish retracement could hit 1908 or 1922 Fibonacci levels to complete wave B of (Y). Afterwards, wave C should follow to 1760 ot 1800 at least.

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