Gold and Elliott Wave Theory

Every trader has a unique trading strategy that includes a wide range of indicators for analyzing the market’s trend. We have some unique indicators that help us determine when to enter or exit a position.

And one of the most popular technical analysis theories that help a trader find recurrent patterns is the Elliott wave theory. In fact, they help traders understand the trend when making some accurate predictions. Therefore, investors apply the Elliott wave in several markets, including commodities like gold.

When used correctly, the gold Elliott wave can help you determine the market’s trend and future direction. So if you want to know if Elliott wave works on gold, please read on…

What Is the Elliott Wave Theory?

Developed by Elliott Nelson, the Elliott Wave is one of the most popular tools in the financial market. It’s a unique theory that’s used in technical analysis to help describe price movements. Ralph developed it after observing and identifying some recurring wave patterns.

The Elliott wave focuses on how the recurrent price pattern relates to the changes in the trader’s psychology and sentiment. It spots the impulse waves that create a pattern and a corrective eave opposing the market’s main trend.

As aforementioned, the Elliott wave can be used to identify the strength of a trend and ride it to the end. Learn in more detail how to trade the highest probability move in an ElliottWave Sequence HERE

Does Elliott Wave Work on Gold?

Like most markets, the price movement of gold is determined by the customers’ sentiments and lots of market news. Therefore, the gold Elliott wave technical analysis is the best analytical tool for determining the market’s trend. In fact, when plotted correctly, you can ride the waves to the end.

Remember, even gold forms motive and corrective waves; detecting the 12345 waves is quite easy. Therefore, the gold Elliott wave analysis can help you spot the recurrent patterns created by the contrasting effects of the central bank and high inflation.

But the Elliott wave theory has failed a few times in the past. For instance, in 2009, the gold Elliott wave analysts predicted that the price would drop to $650. Unfortunately, the price didn’t exceed $865, meaning that you cannot rely on it alone.

Why Use Elliott Wave Forecast for Gold?

The Elliott wave is a reliable tool that can help you determine the general trend of the market.

So if you’re unsure of the overall trend of the market, then you can look for the impulse waves 12345 and ride it till the end.

Remember, it can’t give you the exact extent of how far the wave will stretch, but it can help you determine the market’s trend. And with the trend determined, you can plot the Elliott waves and ride the trend making sure that you always enter the market at extreme lows and highs.

Another great reason why traders love the gold Elliottwave technical analysis is that it can help predict when the market will go. When plotted correctly, the gold price Elliott wave will show you when to enter or exit a position in the future.

But you have to use it together with other tools, indicators, and patterns. Remember, no single indicator is 100% accurate.

Gold Forecast & Signals

The image below is using our ThinorSwim Version of out xBrat Elliott Wave Trading Software. The bearish Trend on the left tracked well for ElliottWave behavior and the software labelled the wave count in real time. The Wave 4 Behaviour was measured and the automated 5th Wave Target Zone was hit and acted as strong support.  The current Bullish Trend has pulled back on a Wave 4 and if this support Holds our Automated 5th Wave Target Zone is predicting a price of around $2025. The xBrat Elliott Wave Trading Indicator Suite is vailable for many different trading platforms HERE 

gold elliott wave

Other than the gold Elliott wave count, there are several indicators that you can use to monitor the market. Some of the most common signals include the MACD (Moving Average Convergence/Divergence), CCI indicator, and RSI indicator.

You can use these indicators together with the gold Elliott wave long term to predict the exact trend and future movement of the market.

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