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Yesterday’s Elliott wave and classic technical analysis expected some sideways / upwards movement for Thursday, which is exactly what happened.

Price has found resistance right at the trend line on the daily chart.

Summary: A short, quick wave down to a new low may unfold here. If price remains below 1,230.74 in the short term and moves lower, then look out for a surprisingly brief wave down. Thereafter, expect a big trend change and a new wave up that should move to new highs in coming weeks. In the short term, if price makes a new high above 1,230.74, then the next wave down may be deeper and more long lasting.

New updates to this analysis are in bold.

Grand SuperCycle analysis is here.

Last monthly and weekly charts are here.


Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

The larger structure of primary wave X may be either a double zigzag or a double combination. The second structure in this double for primary wave Y may be either a zigzag (for a double zigzag) or a flat or a triangle (for a double combination).

It is my judgement at this stage that it is more likely primary wave X will be a double zigzag due to the relatively shallow correction of intermediate wave (X). Although intermediate wave (X) is deep at 0.71 the length of intermediate wave (W), this is comfortably less than the 0.9 minimum requirement for a flat correction. Within combinations the X wave is most often very deep and looks like a B wave within a flat.

However, there is no minimum nor maximum requirement for X waves within combinations, so both a double zigzag and double combination must be understood to be possible. A double zigzag is more likely and that is how this analysis shall proceed.

Within the second structure, minor wave A should be a five wave structure. This now looks complete.

Minor wave B is so far finding resistance at the lower edge of the wide parallel channel about primary wave X. If price remains below they trend line, then the target will remain the same. At 1,204 intermediate wave (Y) will reach equality with intermediate wave (W). At 1,198 minor wave C would reach 0.236 the length of minor wave A.

Minor wave C may be a surprisingly short, sharp downwards wave. When intermediate wave (Y) is complete, then a major trend change is expected for Gold.


Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

So far, at this stage, it looks like minor wave B may have completed as a regular contracting triangle.

If price makes a new high above 1,230.74, then the triangle would be invalidated. At that stage, it would be possible that minor wave B could be unfolding as a flat or combination. The target for it to end would be close to the 0.236 Fibonacci ratio at 1,241 in the first instance.

Minor wave B may not move beyond the start of minor wave A above 1,336.14.

Draw a channel using Elliott’s technique for a correction about this zigzag downwards. Draw the first trend line from the start of minor wave A to the end of minor wave B, then place a parallel copy on the end of minor wave A. If minor wave B continues, redraw this channel. Minor wave C may end either about the mid line or about the lower edge.

If the triangle remains valid and price starts to move strongly lower, then look out for a very quick end to this downwards trend. Gold often has surprisingly short and quick movements out of its triangles.

If the triangle is invalidated with a new high above 1,230.74, then the target for minor wave C downwards may not be low enough.



Gold Weekly 2016
Click chart to enlarge. Chart courtesy of

A strong downwards week comes with a very strong increase in volume. The fall in price is well supported.

The long upper wick on last weekly candlestick is very bearish.

On Balance Volume gives a bearish signal last week with a break below support at the purple trend line.

RSI is not extreme. There is plenty of room for price to fall. Also, there is no divergence between price and RSI this week to indicate weakness.

The larger picture last week is very bearish.


Gold Daily 2016
Click chart to enlarge. Chart courtesy of

A small range day moves price higher with a higher high and a higher low. The upper wick on today’s candlestick is bearish, and the substantial decline in volume indicates bulls are very weak. This looks like a small counter trend correction.

This small upwards day has brought RSI up from oversold. There is again a little room for price to fall, but not much.

ADX is declining, indicating the market is not trending. ATR agrees as it too is declining.

Bollinger Bands disagree as they are widening. With price returning from just outside the lower edge, some reaction may be expected about here.

This analysis is published @ 05:31 p.m. EST.