Select Page

A little more downwards movement was expected for Monday to a small target zone at 1,319 – 1,322.

The low for Monday is at 1,320.94, right in the target zone.

Summary: Price should turn upwards as an upwards trend develops. Range and volatility are expected to increase. The long term target remains at 1,585. The volume profile remains bullish and supports the Elliott wave count.

New updates to this analysis are in bold.

Last weekly charts are here.

Grand SuperCycle analysis is here.


Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

Primary waves 1 and 2 are complete. Thereafter, this wave count differs from the alternate.

This main wave count will expect primary wave 3 to be longer than primary wave 1. Because this is very common, this is the main wave count. It expects the most common scenario is most likely. At 1,585 intermediate wave (3) would reach 1.618 the length of intermediate wave (1).

Intermediate wave (2) may now be complete ending just below the 0.382 Fibonacci ratio of intermediate wave (1) and lasting 40 days. Within intermediate wave (3), minor wave 2 may not move beyond the start of minor wave 1 below 1,302.93.

Draw a channel about intermediate wave (2) using Elliott’s technique for a correction (blue lines). Price is finding some resistance on the way up about the upper edge. After breaking through resistance at the upper blue line price may then turn down to find support about there.

With this wave count expecting a third wave at two large degrees to begin, look out for surprises to the upside at this stage.

Intermediate wave (1) lasted 27 days and intermediate wave (2) lasted 40 days. Intermediate wave (3) may be reasonably expected to last longer than intermediate wave (1) in both time and price. A Fibonacci 55 days would be a first expectation.


Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

The structure of minor wave 2 is now a complete double zigzag ending just very slightly below the 0.618 Fibonacci ratio of minor wave 1. This is the most common depth for a second wave, and one of the most common structures. This wave count follows a very common scenario.

Within the first zigzag of the double, minuette wave (c) is just 0.09 short of 1.618 the length of minuette wave (a).

Within the second zigzag of the double, minuette wave (c) has no Fibonacci ratio to minuette wave (a).

The pink best fit channel is slightly adjusted. While price remains within it the risk that minor wave 2 may continue lower must be accepted. If it does continue lower, it may not move beyond the start of minor wave 1 below 1,302.93.

At 1,451 minor wave 3 would reach 2.618 the length of minor wave 1. Minor wave 3 may only subdivide as a simple impulse.

There will be more pullbacks along the way up. The next pullback to show up on the daily chart would be minute wave ii. First, another five up for minute wave i must complete, which may last two to three days and may reasonably be expected to move above the end of minor wave 1 at 1,352.18.

When the best fit channel is breached by clear upwards (not sideways) movement, then the invalidation point at the hourly chart level may be moved up to the end of minor wave 2 at 1,320.94.


Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

It is possible that primary wave 3 is over and shorter than primary wave 1. Primary wave 3 shows stronger volume than primary wave 1 (see technical analysis weekly chart).

If primary wave 3 is over, then the current consolidation for Gold would be primary wave 4.

Primary wave 2 was a relatively shallow 0.35 expanded flat correction. Primary wave 4 may be a deeper zigzag which would exhibit perfect alternation.

Within primary wave 5, no second wave correction may move beyond the start of its first wave below 1,302.93.

Primary wave 5 would be limited to no longer than equality in length with primary wave 3, so that the core Elliott wave rule stating a third wave may not be the shortest is met. Primary wave 5 would have a limit at 1,477.77.

The hourly chart would be exactly the same.



Gold Weekly 2016
Click chart to enlarge. Chart courtesy of

Last week moved price reasonably higher, but as yet now a new high above 1st August or 5th July has been made. The green candlestick colour is bullish, but the long upper wick is bearish. The decline in volume for an overall upwards week is bearish, but to understand what is exactly happening in terms of volume it needs to be looked inside at daily volume bars.

On Balance Volume remains bullish with an upwards move further away from the yellow support line.

RSI is still not extreme. There is room for price to rise or fall.


Gold Daily 2016
Click chart to enlarge. Chart courtesy of

Another downwards day comes again with relatively light volume compared to prior upwards days. Although Monday’s session has a small increase in volume over Friday, it is still lighter than the day before of 8th September. Overall, the volume profile short term is still clearly bullish. The fall in price has little support from volume.

Price may find some support here about the 55 day moving average.

Gold remains range bound. The sideways consolidation began back on 7th of July. It is now three upwards days of 8th of July, 26th of August, and 6th of September that have strongest volume. The signal is clear. Gold is more likely to break out of this consolidation upwards than downwards. Resistance is about 1,375 and support about 1,305.

The shortest moving average, a Fibonacci 13, is pointing lower but remains above both the mid term and long term moving averages. The Fibonacci 55 day moving average is now flat, but the long term 200 day moving average is still pointing upwards. The larger trend remains up.

On Balance Volume did not find support at the short term green trend line. It may now find support at the yellow trend line. This line is more technically significant as it is longer held and almost horizontal, so it offers more strength.

RSI is now just below neutral. There is plenty of room for price to rise or fall. There is no divergence today between price and RSI to indicate weakness.

ADX is declining indicating the market is not currently trending. The +DX line is now almost touching the -DX line. A cross over would indicate a potential trend change, but the black ADX line must increase also to indicate a downwards trend.

ATR is also declining for four days in a row now. Range for the last four days is very clearly smaller than prior upwards days. This strongly suggests that this downwards movement is a counter trend pullback and not the start of a new downwards trend.

Stochastics did not manage to reach overbought at the last high.

Bollinger Bands are still tightly contracted. This also supports the idea that the last four days downwards movement is a counter trend movement and not the start of a new trend.

This analysis is published @ 07:05 p.m. EST.