The gold chart indicates a possible correction of gold to $2,000 within the framework of wave (a) according to the Elliott wave theory.

This raises the question of a possible global deflationary scenario.

Let's look at how this relates to data on Fed rates, bond yields, and the dollar index.

Elliott Wave Theory – is it a reliable indicator?

Elliott waves are a subjective method of analysis. It does not guarantee that the market will behave exactly as the markup predicts.

For example, wave 5 does not always mean an imminent correction – sometimes the market continues to grow in an extended fifth wave.

However, historical examples (1980, 2011) show that gold can indeed adjust after powerful bullish trends.

Relation to current macroeconomic trends:

Gold, Interest rates, and the Fed

Gold has historically been growing against the backdrop of lower interest rates and a weakening dollar.

However, until the Fed has started aggressively cutting rates, bond yields remain relatively high, which makes gold less attractive (it does not generate income, unlike bonds).

If the Fed delays a sharp easing of policy, it may cause a correction in gold to $2,000, as shown in the forecast.

Bonds (US10Y) and the Dollar Index (DXY)

The decrease in the yield of 10-year bonds (-5.58% YTD) indicates that the markets are already planning future rate cuts.

The dollar index (DXY) in correction shows that liquidity is gradually returning to the market, but for now the dollar remains strong, which puts pressure on gold.

If the Fed cuts the rate more slowly than the market expects, the dollar may strengthen, which will put pressure on gold and accelerate the correction.

Global deflation?

The gold chart hints at a scenario in which the Fed will not begin aggressive easing (or slow it down), which will lead to a temporary strengthening of the dollar and a decrease in demand for gold.

If the Fed is in no hurry to cut rates, it may mean that the market is starting to put deflationary risks – a strong dollar, falling demand for assets, and potential pressure on commodity markets.

This scenario will be negative for gold in the short term, but bullish in the long term when the Fed is forced to start QE.

What does this mean for the markets?

• In the short term: gold may adjust to $2,000 if the Fed does not confirm an early rate cut.

• In the long term: if inflation starts to rise again or the Fed does switch to easing (which the market expects), gold may resume growth.

• For Bitcoin: Gold and BTC have historically correlated in an environment of a weak dollar and low interest rates, so further dynamics will depend on the Fed's actions.

If we estimate the probability of a gold correction based on current macroeconomic data, then the most likely scenario is a correction of gold to $ 2000–$ 2200 with a probability of 60-70% if the Fed does not confirm the imminent start of easing.

However, if the Fed gives a signal of imminent rate cuts or launches QE, the decline will be limited and will quickly be replaced by growth.

Conclusion:

If the Fed does not hint at imminent rate cuts on March 19, gold may continue to correct, and the dollar may temporarily strengthen.

If the Fed starts to show dovish sentiment, the market will begin to impose aggressive easing, and gold (and BTC) may receive support.

In the long term, QE is inevitable, and when it begins, gold and BTC will once again be in the spotlight as defensive assets.

As long as the Fed is balancing inflation and deflation risks, markets will continue to experience increased volatility.