Gold bounce only correction within downtrend: Elliott Wave

Source: Bloomberg Source: Bloomberg

Gold (COMEX:GCG14) turned bearish at the start of September after breaking through the rising trend line of a corrective channel. We knew at the time that it was an important signal for a change in trend, which means that bearish price action is back in play, which also accelerated at the end of December. So, we assume that price is moving down in a larger wave 5) heading through the $1,180 June low. With that said, we think that the current bounce is most likely just another corrective rally in the middle of a bearish trend. Resistance is seen around $1,250-$1,270 from which the new sell-off could occur.

GOLD Daily Elliott Wave Analysis

GOLD four-hour

Gold has reached a new swing high around $1,254 this week from which we can see some bearish price action. At the moment, a decline from $1,254 is definitely still not enough to confirm an end of a three wave (a)-(b)-(c) corrective rally. But further weakness today and tomorrow, back to the $1,216 wave (b) zone will suggests that a new sell-off on gold is in progress.

GOLD four-hour Elliott Wave Analysis

About the Author

Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for Capital Forex Group and TheLFB.com. He also is founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: http://www.ew-forecast.com/

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