If you have been following Gold over the last few years you are probably frustrated like most Gold bulls are, essentially Gold and Gold stocks have gone nowhere for the past two years, although you could argue that the many Gold stocks have a downwards bias the past two years, but Gold is still above the Dec 2016 lows.

There are a number of patterns that I am currently watching and no one idea has a strong foothold, although if any upside fails to move above $1340, then it will make a better case for Idea 3 and a large triangle has been in progress over the last 2 years.

Both the Ideas 2 & 3 can still argue for some variation of a triangle and a rally towards $1300 – 1320. If however the market continues to move below $1122 (Dec 2016 low), then Idea 1 will be favored and a large 3 wave decline from $1375 is developing for a [X] wave. The lower it moves the more bullish I am based on the idea of at least a rally towards $1300 – 1320 or higher, as the more bearish idea (Idea 3) would still favor a move towards $1300 - 1320 to end the triangle idea.

Corrective patterns are notoriously difficult to predict, let alone trade, as they have a habit of morphing, but a skilled Elliottician can put into context the price action and present some ideas that can help investors and traders make better decisions. It would need a large breakdown under $1060 to consider a possible breakdown is in development, but as it stands I still like the idea of a rally, even if the market moves below $1122 before a move higher starts. If $1160 marks a short term low point, for one of the triangle ideas (Idea 2 or Idea 3). Then a rally towards $1300 – 1320 would be favored over the following weeks.

Technically as long as price remains above $1122 either of the triangle options remain valid, only a break of $1122 (Dec 2016 low) would suggest we consider Idea 1 and look for low around $1100 - 1120 to setup for a rally back above $1375 (Jul 2016 high).

The last idea (not shown) is that a large 3 wave rally from $1046 truncated at $1366 (Jan 2018 high) and the market is about to break down below $1046 (Dec 2015 low). Whilst it’s not one of my favored ideas, it’s not something I can totally rule out as the bigger picture ideas still eventually point to a move back below $1046 to end the decline from $1920.

Until next time,

Have a profitable week ahead.

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