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Downwards movement is finding support perfectly at the aqua blue trend line on the daily chart. The Elliott wave count remains valid and the same.

Summary: I expect a short sharp upwards thrust on Monday to 1,247. If this target is wrong it may be too low.

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Gold Elliott Wave Chart Daily 2014

Primary wave 4 is complete and primary wave 5 is unfolding. Primary wave 5 may only subdivide as an impulse or an ending diagonal. So far it looks most likely to be an impulse.

Within primary wave 5 intermediate wave (1) fits perfectly as an impulse. There is perfect alternation within intermediate wave (1): minor wave 2 is a deep zigzag lasting a Fibonacci five days and minor wave 4 is a shallow triangle lasting a Fibonacci eight days, 1.618 the duration of minor wave 2. Minor wave 3 is 9.65 longer than 1.618 the length of minor wave 1, and minor wave 5 is just 0.51 short of 0.618 the length of minor wave 1. I am confident this movement is one complete impulse.

Intermediate wave (2) is an incomplete expanded flat correction. Within it minor wave A is a double zigzag. The downwards wave labelled minor wave B has a corrective count of seven and subdivides perfectly as a zigzag. Minor wave B is a 172% correction of minor wave A. This is longer than the maximum common length for a B wave within a flat correction at 138%, but within the allowable range of twice the length of minor wave A. Minor wave C may not exhibit a Fibonacci ratio to minor wave A, and I think the target for it to end would best be calculated at minute degree. At this stage I would expect intermediate wave (2) to end close to the 0.618 Fibonacci ratio of intermediate wave (1) at 1,283.27 (*Note: the Fibonacci retracement tool on Motive Wave is calculating the Fibonacci ratios wrong, so I have removed it and I’ll do this manually).

Intermediate wave (1) lasted a Fibonacci 13 weeks. If intermediate wave (2) exhibits a Fibonacci duration it may be 13 weeks to be even with intermediate wave (1). Intermediate wave (2) is now at the end of its ninth week, and so it may continue now for another four weeks in total.

So far within minor wave C the highest volume is on an up day. This supports the idea that at this stage the trend is up.

The upper maroon trend line is the upper edge of the Elliott channel drawn about this impulse on the weekly chart, and copied over here to the daily chart. See the most recent Gold Historic Analysis to see how this trend line is drawn on the weekly chart. If minor wave C lasts long enough it should find extremely strong resistance at that trend line, I would not expect that trend line to be broken while primary wave 5 is incomplete.

The aqua blue trend line is a simple TA trend line which is showing where price is currently finding (*edited) support. The power of the middle of the upcoming third wave has broken above this trend line.

The target for primary wave 5 at this stage remains the same. At 956.97 it would reach equality in length with primary wave 1. However, if this target is wrong it may be too low. When intermediate waves (1) through to (4) within it are complete I will calculate the target at intermediate degree and if it changes it may move upwards. This is because waves following triangles tend to be more brief and weak than otherwise expected. A perfect example is on this chart: minor wave 5 to end intermediate wave (1) was particularly short and brief after the triangle of minor wave 4.

Within minor wave C now the third wave is underway. Within minuette wave (iii) no second wave correction may move beyond its start below 1,186.29.

Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 1,345.22. I have confidence this price point will not be passed because the structure of primary wave 5 is incomplete because downwards movement from the end of the triangle of primary wave 4 does not fit well as either a complete impulse nor an ending diagonal.

To see a prior example of an expanded flat correction for Gold on the daily chart, and an explanation of this structure, go here.

GOLD Elliott Wave Chart 2014

The second wave continued further as a double zigzag which was allowed for. We now have a series of three overlapping first and second waves, and interestingly each second wave correction subdivides best as a double zigzag, and each second wave correction is more brief than the one before it.

Minute wave ii was a deep 84% double zigzag lasting nine days. Minuette wave (ii) was a shallow 45% double zigzag lasting four days. Subminuette wave ii is now a shallow 45% double zigzag lasting three days.

I am more confident today that subminuette wave ii is over. On the five minute chart the first wave up from the low labelled subminuette wave ii at 1,214.37 subdivides perfectly as a five wave impulse.

At 1,247 subminuette wave iii would reach 0.618 the length of subminuette wave i. This target may be met on Monday with a short sharp upwards thrust for the middle of this third wave. If this target is wrong then it may be too low; the middle of the third wave may be longer. At this stage I am only able to calculate the target at subminuette wave degree.

Within subminuette wave iii micro wave 2 may not move beyond the start of micro wave 1 below 1,214.37.

Copy the aqua blue trend line over to the hourly chart. It looks like downwards movement is finding support very close to this trend line.

If price moves below 1,214.37 then I would expect subminuette wave ii may be continuing further. The invalidation point would have to move back down to 1,186.29 for the hourly chart. I think this is now very unlikely (but it is possible).

This analysis is published about 02:55 p.m. EST.