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Yesterday’s analysis expected the completion of a small triangle to be followed by a sharp downwards thrust. The update for yesterday gave a target for this downwards thrust to end at 1,305. It ended at 1,305.90.

We now have a clear channel breach on the hourly chart so I can calculate a target for the next wave upwards with some confidence.

Click on the charts below to enlarge.

Gold Elliott Wave Chart Daily 2013

There are still several possible structures for primary wave 4. So far we have a three down from the high at 1,433.83. This three down is less than 90% the length of intermediate wave (W) so it cannot be a B wave within a flat over there. This structure may be a double zigzag or double combination. In a double combination the second structure labeled intermediate wave (Y) may be either a flat or triangle.

It is most likely at this stage that primary wave 4 is continuing as a double zigzag rather than a combination, because combinations commonly have X waves which are deeper than this one is. Intermediate wave (Y) is most likely to be a zigzag.

Primary wave 2 was a deep 68% regular flat correction lasting 54 weeks. Given the guideline of alternation we may expect primary wave 4 to continue for longer than it has so far, possibly for another nine weeks to last a Fibonacci 21 (give or take one week either side of this). If it completed as a double zigzag there would be nice alternation in structure with primary wave 2.

Primary wave 4 has already passed the 0.382 Fibonacci ratio, so it may end about the 0.618 Fibonacci ratio of primary wave 3 at 1,529.97. It should find resistance at the upper edge of the parallel channel drawn here using Elliott’s first technique.

When I know where minor waves A and B within primary wave Y have ended then I can use the ratio between minor waves A and C to calculate a target for upwards movement to end. I cannot do that yet.

Primary wave 4 may not move into primary wave 1 price territory. This wave count is invalidated with movement above 1,532.90.

GOLD Elliott Wave Chart Hourly 2013

So far within minor wave A there is a clear five wave impulse up for minute wave i, and a clear three wave zigzag down for minute wave ii. The channel drawn about minute wave ii using Elliott’s technique for a correction is clearly breached by upwards movement.

Within minute wave ii minuette wave (c) is just 0.71 short of 0.382 the length of minuette wave (a). Minuette wave (c) ends midway within the parallel channel which is also common.

Movement above 1,329.43 would provide further confidence in the target. At that stage upwards movement could not be a second wave correction within minuette wave (c), and so minuette wave (c) would have to be over.

Alternate Wave Count.

Gold Elliott Wave Chart Daily Alternate 2013

I have tried to see as many alternates as I can. This wave count is possible but it has problems of proportion which make it look odd. I will publish it as a slim outlying possibility. I would only use it if it is confirmed with movement below 1,291.95.

If primary wave 4 is over then it lasted only 9 weeks, compared to primary wave 2 which lasted 53 weeks. This gives the monthly chart the wrong look.

Within recent downwards movement minute wave ii may not move beyond the start of minute wave i. This wave count is invalidated with movement above 1,416.45. If price moves above this point next week I would have more confidence in the main wave count.