Gold Prices Under Pressure Amid Easing Tensions

Pyongyang (Apr 23)  North Korea’s Kim Jong-un appears to have finally come to his senses. The isolated communist country announced it will discontinue its nuclear tests and close down its test site. The North Korean leader will meet with U.S. President Donald Trump in June to discuss the Asian country’s complete denuclearization. And while peace in Syria is still a distant dream, the possibility of North Korea without nuclear weapons provides a partial sense of relief and the markets reflect it through gold prices, which fell from $1356 to below $1331 in less than a week.

What it even more interesting is the fact that gold prices were set to drop anyway. The chart below on April 18th, shows how the Elliott Wave Principle put traders ahead of the news.

 The only thing Elliott Wave analysts had to do, in order to prepare for the current weakness, was to spot the five-wave impulse pattern from $1365 to $1333.50. According to the theory, impulses develop in the direction of the larger sequence. Once the corresponding three-wave w-x-y recovery was over, the downtrend was supposed to resume. As long as gold prices stayed below the invalidation level at $1365, another selloff towards $1330 was highly probable. Four trading days later, the updated 30-minute price chart of gold looks like this:

 Wave “y” climbed to $1356 the very same day, but it never put $1365 in danger. Instead, the bears took over and slowly but surely dragged gold prices to a new low earlier today. Even if you are lucky enough to live in the woods and have never heard of Kim Jong-un, North Korea and nuclear weapons, the 5-3 wave cycle on the chart of gold would have still warned you about the recent price plunge.

Investing.com