The yellow metal dropped from a 7-year high of $1689 to as low as $1563. In other words, the best safe-haven lost 7.5% just when investors needed it most. Popular financial media attributes gold’s decline to profit-taking from traders. Had gold been rising, they could’ve just as easily explained it with the corona virus.
Gold’s 4-hour chart reveals what we believed was waves 2, 3, 4 and 5 of a five-wave impulse. According to the theory, a correction follows every impulse pattern. So, instead of joining the bulls near $1640, i thought “long positions should be avoided, despite all the fundamental reasons to be bullish (refer to article published on Feb 20 and Feb 25)
And the list of fundamental reasons to be bullish on gold as a safe haven asset was a long one - The corona virus, Slow economic growth, Continued easing by the Fed, The inverted yield curve signalling a possible recession, and so on. Yet, gold ignored everything and fell anyway
Gold reached $1689 on Monday, but spent the rest of the week declining. A single Elliott Wave pattern proved more reliable than all the bullish reasons above.
Gold’s 4-hour chart reveals what we believed was waves 2, 3, 4 and 5 of a five-wave impulse. According to the theory, a correction follows every impulse pattern. So, instead of joining the bulls near $1640, i thought “long positions should be avoided, despite all the fundamental reasons to be bullish (refer to article published on Feb 20 and Feb 25)
And the list of fundamental reasons to be bullish on gold as a safe haven asset was a long one - The corona virus, Slow economic growth, Continued easing by the Fed, The inverted yield curve signalling a possible recession, and so on. Yet, gold ignored everything and fell anyway
Gold reached $1689 on Monday, but spent the rest of the week declining. A single Elliott Wave pattern proved more reliable than all the bullish reasons above.