November 6 Gold Elliott wave analysis

Gold is running toward 1950 as the US election results continue to the 4th day. The following November 6 Gold Elliott wave analysis shares some technical insights.

November 6, 2020, / AtoZ Markets – Gold has gained close to 5% in November as the often risk-off commodity seems to flow in the direction of risk-on instruments. We can attribute this to the USD weakness as a result of Biden’s lead and the second outbreak of Covid19 is boosting demand for the dollar-denominated commodity. While anything could still happen in the course of the election final result, it’s clear the market is pushing for a risk-on Biden win and a risk-off Trump win. If Biden eventually is declared winner, Gold could touch 2000 or at least 1980 despite the perception that much of the impact has already been priced-in. However, a surprising turn around would lead to a much drastic fall of the metal.

Another reason for a Gold rally could be as a result of some indecision in the US election or President Trump going to the Supreme court as threatened. More bid could flow into safe-havens and see the commodity shoot higher. In whatever case, only President Trump’s turn-around win would be strong enough to cause a sharp dip in the short term.

Gold from USD perspective

The Fed added to the USD bearishness on Thursday with some dovish comments as the second wave of the virus stunted economic recovery. Recent cases in the US hit 100,000 on Thursday. The apex bank will come with a fresh stimulus package after the election. However, the size is yet unknown until after the elections. Friday’s employment data could add to the current volatility. In the short term, it seems the USD and Gold will drive in opposite direction. Therefore sentiments around the USD could help traders navigate the dollar-denominated Gold.

November 6 Gold Elliott wave analysis – weekly chart

November 6 Gold Elliott wave analysis

Chart from TradingView

On the weekly chart, it’s clear, according to November 6 Gold Elliott wave analysis, XAU still has some way to the upside in the long term. The 5th primary wave could hit 2200 at least and 2400 ideally. The surge to the 2080 is the 3rd sub-wave of the intermediate wave (3). The recent dip is wave 4 of (3). Ideally, wave 4 should hit 1728 (38.2 Fibonacci retracement of wave 2-3). This suggests the current surge might not push above 2080 until a lower dip region of 17xx happens.  When the final outcome of the US election is confirmed, we will have a clearer outlook including the short-term forecasts.

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