Gold - Neo wave and 51 Days’ Time cycle
Apr 26, 2023
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Gold is following its own independent Elliott wave pattern and Time Cycle. In the below chart we have shown the Gold movement along with the Neo wave and 51 Days’ Time cycle.
Gold Weekly chart
Gold Daily chart
Gold made lifetime high at start of the April month. After trading near all-time highs, we are witnessing some profit booking in the commodity. The primary reasons for the rally in the Gold also includes softening of dollar index. As, Dollar Index has fallen to a 2-month low, and the hope of the Federal Reserve to pause in an interest rate which could add fuel to the rally. The Fed has increased interest rates nine times in the last year. However, due to the increase in the interest rate, the possibility of an economic recession cannot be ruled out. Overall signs are suggesting that medium term outlook for this asset is likely to remain positive.
MCX Gold Neo wave perspective on weekly chart: As per wave perspective, in the mid of 2016 primary wave (4) completed and since then the entire rise that we are witnessing is in form of primary wave (5) In the first quarter of 2022, intermediate wave 4 of primary wave (5) finished its course, wherein minor wave ii has completed on the downside and the recent up move that we are witnessing is in form of wave iii.
On the Weekly chart, Gold is following the multiyear channel really well. Whenever prices reversed from channel support then an upside rally was seen. Recently, after reversing from the lower end of the channel now prices have shown a good steep rally. Also, ADX is trading near 48 suggesting that good momentum can continue which is acting as a confirmation.
On the Daily chart, our cycle of 51 Days is working out really well which was due on 21st April but still price confirmation is pending. Let’s take a look at Bollinger bands. Wherein mid bands are acting as a brilliant support and every time prices have reversed back from it. However, the medium-term trend for the metal is still on the upside as primary wave iii is unfolding on the upside which is considered as a strongest one. However, If Gold trades below 59600 then it may fall till 58500 on the lower side.
In a nutshell, after a sharp rally, currently we are witnessing some profit booking and short-term correction towards 59600 is possible. However, trend for Gold is bullish and any dips should be used as a buying opportunity. Move above 61000 will confirm short term correction has completed and fresh buying can be seen which can lift price higher towards 62200 levels.
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