Gold, since mid December 2017, has been very strong. Now trying to break above 1360 resistance, what is the long term possibility? The 15 February Gold Elliott wave analysis below looks at the long term forecast of this commodity.
In the last quarter of last year, despite price dropping below the September 1360 high, I maintained that Gold’ intermediate direction is bullish. Since it broke upside in 2015 after dropping close to $1000, there has been the case of a bullish 3-wave correction. The 3-wave corrective bullish move followed after price crashed in 2011 from more than $1900 to close to $1000 in November 2015. The chart below shows all of these as price moved in waves.
The chart below shows a simple Elliott wave illustration- a 5-wave dip with a 3-wave corrective rally. The corrective rally should be a zigzag pattern after completing an impulsive wave (A) and a zigzag wave (B). What pattern will emerge in wave (C)?. There are only two possible patterns for wave (C) according to Elliott wave theory. We can either have an impulse wave or an ending diagonal. Price structure from the end of wave (B) shows an emerging pattern closer to an ending diagonal than an impulse wave. If there will be an ending diagonal, the expected structure is modeled below.
There we have it. An ending diagonal which could end around 1450-1500. The pattern is more of an expectation than emerging. Until the 4th leg is complete, we can’t call this is an emerging diagonal pattern. But, well, it’s good to have an idea of what price could do. I will watch this closely and share any development on my Free Telegram channel before posting here. Get ready and be ahead of the market with Elliott wave theory.
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