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Yesterday’s short term target at 1,205 has been comfortably passed, and at the time of publication price is 13.67 below the target.

The wave count remains the same.

Click on the charts below to enlarge.

Gold Elliott Wave Chart Daily 2013

Gold is still within a large fourth wave correction at primary wave degree which is incomplete. To see a full explanation of my reasoning for expecting that primary wave 4 is not over and is continuing see this.

Primary wave 2 was a rare running flat correction, and was a deep 68% correction of primary wave 1. In order to show alternation in structure primary wave 4 may be a zigzag, double zigzag, combination, triangle or even an expanded or regular flat. We can rule out a zigzag because the first wave subdivides as a three. This still leaves several structural possibilities.

The downwards wave labeled intermediate wave (B) is now over 90% the length of the upwards wave labeled intermediate wave (A). Primary wave 4 may be a flat correction, but it may also still be a combination or triangle as there are still several different structural possibilities.

At 1,167.73 intermediate wave (B) would be 105% the length of intermediate wave (A), and primary wave 4 may be an expanded flat correction. Expanded flats normally have C waves which move substantially beyond the end of the A wave, and which are often 1.618 and sometimes 2.618 the length of the A wave. If 1,167.73 is reached and passed then the subsequent upwards wave for intermediate wave (C) may reach well above 1,433.83.

Within minor wave C there was no Fibonacci ratio between minute waves iii and i. This makes it more likely we shall see a Fibonacci ratio exhibited between minute wave v and either of i or iii. At 1,159 minute wave v would reach equality in length with minute wave iii. This lower target allows enough room for minute wave v to complete.

Downwards movement has breached the parallel channel drawn about intermediate wave (B) downwards. It may find support at the next trend line.

Draw a parallel channel about minor wave C downwards with the first trend line from the highs labeled minute waves ii to iv, then place a parallel copy upon the low labeled minute wave iii. If it gets that low downwards movement should find support at the lower edge of this channel.

When the channel about intermediate wave (B) is finally breached by upwards movement then I would consider that final confirmation that intermediate wave (C) is underway.

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

Downwards movement breached the acceleration channel drawn about minuette waves (i) and (ii) on yesterday’s hourly chart, as was expected. I have removed the channel now and will use the pink channel copied over from the daily chart. Minute wave v may find support here at the lower edge of the channel, but sometimes fifth waves for Gold are strong and break through these channels to end with an overshoot. Looking at targets this may be what will happen here.

The lower edge of the pink channel copied over from the daily chart may provide support and subminuette wave iv may bounce up from here. At 1,180 subminuette wave iii would reach 2.618 the length of subminuette wave i.

Subminuette wave ii was a deep 70% regular flat correction lasting 26 hours, and it did not show as a green candlestick on the daily chart. I would expect subminuette wave iv to be more shallow, and it may be a combination, triangle or zigzag. It should be completed within 24 hours, and should not show as a green candlestick on the daily chart. This expectation is the strongest of all the predictions I can make for this upcoming fourth wave correction.

When price turns up for a few hours, and subminuette wave iii looks like it is completed, then the orange channel about minuette wave (iii) may need to be redrawn. Draw it first with a trend line from the lows of subminuette waves i to iii, then place a parallel copy upon the high of subminuette wave ii. I will expect subminuette wave iv to remain within the channel as it may find resistance at the upper edge.

Also draw a Fibonacci retracement along the length of subminuette wave iii and favour the 0.236 and 0.382 ratios as targets. If one of these ratios is between 1,193.02 and 1,197.65 then it would be within the fourth wave price territory of one lesser degree, and so have a higher probability.

At 1,175 minuette wave (iii) would reach 1.618 the length of minuette wave (i). This target may be about two days away.

Alternate Daily Wave Count – Triangle.

Gold Elliott Wave Chart Daily Alternate 2013

It is also possible that primary wave 4 may continue as a regular contracting (or barrier) triangle.

A new low below 1,180.40 is also possible for this wave count if the triangle is a running triangle, as about 40% of triangles are.

The expected direction and structure of this next upwards wave is the same, but for this alternate intermediate wave (C) of the triangle may not move beyond the end of intermediate wave (A). The triangle is invalidated with movement above 1,438.83.

The final intermediate wave (E) upwards may not move above the end of intermediate wave (C) for both a contracting and barrier triangle. E waves most commonly end short of the A-C trend line.

All five subwaves of a triangle must divide into corrective structures. If this next upwards movement subdivides as a zigzag which does not make a new high above 1,438.83 then this alternate would be correct.

Triangles take up time and move price sideways. If primary wave 4 unfolds as a triangle then I would expect it to last months rather than weeks.