The fourth wave was expected to show on the daily chart, but it does not. Upwards movement now touches the large maroon channel on the weekly chart.
Summary: I am expecting a trend change either now or very soon. First confirmation would come with a new low below 1,244.34 and a clear breach of the orange channel on the hourly chart. Stronger confirmation would come with a clear breach of the green channel on the daily chart. This is a big trend change and patience is essential.
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So far since the all time high at 1,921.15, in September, 2011, Gold is moving lower in five waves. The final fifth wave down is underway.
Primary wave 3 is $12.54 short of 1.618 the length of primary wave 1. At 956.97 primary wave 5 would reach equality in length with primary wave 1. This is the most likely relationship between first and fifth waves, so this target has the highest probability.
Primary wave 2 was a deep 68% rare running flat correction. Primary wave 4 shows alternation in depth and structure with a shallow 27% regular contracting triangle.
With weekly and daily charts on a semi-log scale, draw a trend channel about this downwards impulse on the weekly chart and copy it over to the daily chart: draw the first trend line from the lows of primary waves 1 to 3, then place a parallel copy on the high of primary wave 2. I would expect downwards movement for primary wave 5 to find support, and maybe end, at the lower trend line. Alternatively, we may see a strong fifth wave typical of commodities and the lower trend line could be breached by strong downwards movement.
Primary wave 1 lasted 3 weeks, primary wave 2 lasted 53 weeks (two short of a Fibonacci 55), primary wave 3 lasted 37 weeks (three longer than a Fibonacci 34) and primary wave 4 lasted 54 weeks (one short of a Fibonacci 55). So far primary wave 5 has lasted 27 weeks. At this stage it may end with a total Fibonacci 55 weeks (give or take one to two weeks either side of this).
While primary wave 5 is underway the upper edge of the maroon channel should not be breached.
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) 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.
If it is seen as a complete impulse there would be inadequate alternation between the single zigzag of the second wave and the double zigzag of the fourth wave correction, and there would be no Fibonacci ratios between the first, third and fifth waves within it which would be highly unusual for Gold. If the upper edge of the maroon channel is breached by one full daily candlestick above it and not touching it then I would publish a wave count which sees primary wave 5 over. I consider this to have a very low probability, and I will only seriously consider it if it begins to show itself to be true.
Intermediate wave (2) is now a complete expanded flat correction. Minor wave C is longer than 1.618 the length of minor wave A, and there is no Fibonacci ratio between them. Minor wave C is now a complete expanding ending diagonal.
Within an ending diagonal all the sub waves must subdivide as zigzags. The fourth wave should overlap first wave price territory. The rule for the end of a fourth wave of a diagonal is it may not move beyond the end of the second wave.
Within the final zigzag up of minute wave v minuette wave (c) does not look like a clear five wave structure on the daily chart, and looks like a three. However, on the hourly chart minuette wave (c) looks like a clear five wave structure, and the final fifth wave is showing divergence with the third wave in momentum. Gold almost always exhibits textbook perfect Elliott wave structures. This is not the same as always. Because there is slight doubt in this case given the look on the daily chart I would advise caution and patience. This is a big trend change.
The structure is complete at all wave degrees and I am now awaiting confirmation of a trend change before I have any confidence in it.
Within minute wave v there is no Fibonacci ratio between minuette waves (a) and (c).
Ratios within minuette wave (c) are: subminuette wave iii is 1.07 longer than equality with subminuette wave i, and subminuette wave v is 1.86 longer than 0.618 the length of subminuette wave iii. Subminuette wave v shows weaker momentum than subminuette wave iii. This looks like a typical and complete impulse. Subminuette wave v slightly overshoots the channel, and this may be where upwards movement ends.
A new low below 1,244.34 would provide some price confirmation of a trend change; at that stage downwards movement could not be a fourth wave correction within minute wave c. A clear breach of the orange channel on this hourly chart would provide trend channel confirmation that minute wave c should be over.
One cause for concern I have regarding this wave count today is what is happening with Silver. I am struggling to see a complete corrective structure upwards for Silver, and I keep concluding that Silver needs to move higher no matter how I label the correction. When I am satisfied that I have a reasonable looking wave count for Silver I will publish it. Given this concern, it is possible that Gold too could move higher and / or sideways before the final high is reached and a trend change is seen.
I will keep a very close eye on Gold, Silver and GDX over the next few days as I expect a trend change for all three markets. For all three I expect a third wave down to begin now or very soon.
This analysis is published about 2:49 p.m. EST.