With continued sideways movement today I am discarding the prior main wave count in favour of the alternate, which will be my only wave count.
Summary: In the short term sideways movement may continue. I have a short term target at 1,300 for a little upwards movement. When the breakout comes it should be to the downside, and it may be very swift. Price movement below 1,277.57 will provide confirmation of the breakout.
This analysis is published about 08:15 p.m. EST. Click on charts to enlarge.
Gold is still within a large fourth wave correction at primary wave degree which is incomplete.
Primary wave 2 was a rare running flat. Primary wave 4 is unlikely to be a flat correction because it is likely to show structural alternation with primary wave 2.
Primary wave 4 is most likely to be completing as a double combination: zigzag – X – second structure. The second structure labeled intermediate wave (Y) is most likely to be a flat correction. Within the flat correction minor wave B must reach a minimum 90% the length of minor wave A at 1,201.98.
If downwards movement does not reach 1,201.98 or below then intermediate wave (Y) may not be a flat correction and may be a contracting triangle. I will keep this alternate possibility in mind as this next wave down unfolds. If it looks like a triangle may be forming I will again chart that possibility for you.
Overall the structure for primary wave 4 should take up time and move price sideways, and the second structure should end about the same level as the first at 1,434. Primary wave 4 may not move into primary wave 1 price territory. This wave count is invalidated with movement above 1,532.90.
Within intermediate wave (Y) minor wave B downwards is an incomplete corrective structure, and at this stage the structure is most likely to be a single zigzag with a triangle for minute wave b which is very close to completion.
Minute wave b may not move beyond the start of minute wave a above 1,392.30. When minute wave b is complete I can calculate a target for you for minute wave c.
Sideways movement since 1st April, 2014 fits now best as a running contracting triangle. This is supported my MACD hovering about the zero line on the daily chart.
Within the triangle minuette wave (b) only fits as a double zigzag. Because only one of the five subwaves of a triangle can be a multiple this means minuette wave (e) must subdivide as a simple three, most likely a simple zigzag.
Within minuette wave (e) subminuette wave b moved lower to find support perfectly at the lower (b) – (d) trendline. At 1,300 subminuette wave c would reach 0.618 the length of subminuette wave a. This would see subminuette wave c slightly truncated, and this may be what happens because the upper (a) – (c) trend line of the triangle should provide strong resistance.
Subminuette wave (e) is most likely to fall short of the (a) – (c) trend line of the triangle, but if not then it may overshoot this trend line.
When subminuette wave (e) is finally complete I would expect price to move very strongly downwards out of the triangle.
Movement below 1,277.57 would provide price confirmation of a breakout. At that stage downwards movement cannot be a continuation of subminuette wave b within the final wave of minuette wave (e) of the triangle because B within a zigzag may not move beyond the start of A.
Minuette wave (e) of the triangle may not move beyond the end of minuette wave (d) above 1,315.72.