Let me first start by saying I’ve been a long term “Gold Bull” since the fall of 2001, based both on economic factors as well as Elliott Wave patterns that I think are clear on Gold’s Bull rise. As we are now almost in a Fibonacci 21 months of Gold rally off the October 2008 bottom, I think this pattern is getting long in the tooth.

Gold has risen from $681 at the nadir of the fall of 2008 to $1265 so far, with potential to run to about $1300-$1325 an ounce on this final leg up. It stands to reason, as with any Bull Market that the Bull gets tired and at some point has to hibernate. This wave pattern is clearly 5 waves since the October 2008 lows, and we are in the final stages of the 5th wave of this pattern in my opinion. That means we can have a blow-off top, or we truncate here and start correcting hard.

Bull patterns tend to peak when most are not expecting it, and I forecasted a market top in Mid January and again in Mid April this year in the SP 500 index just prior to huge drops. These forecasts were based on sentiment and Elliott Wave patterns. I am now viewing the $681 to $1,265 rally in Gold as a 5 wave bullish structure that is in the final stages of ascent. Fifth waves are notoriously difficult to predict, but taking some off the table here for intermediate traders is probably a wise decision. Correcting 38% or 50% of the $600 rally would take Gold back to $1030 to $965 area plus or minus, and not invalidate a larger bull structure.

If you would like to view a video forecast with a chart and audio commentary on this Gold forecast, and the preceding wave patterns, go to www.activetradingpartners.com/articles to view for free.

Dave Banister

CIO-Founder
Active Trading Partners, LLC
www.ActiveTradingPartners.com
TheMarketTrendForecast.com

Dave Banister is the Chief Investment Strategist and commentator for ActiveTradingPartners.com. David has written numerous market forecast articles on various sites (SafeHaven.Com, 321Gold.com, Gold-Eagle.com, TheStreet.Com etc. ) that have proven to be extremely accurate at major junctures.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Comments

dincer
29 Jun 10, 18:25

Gold is a currency

I think the above analysis is flawed. Gold is not an ordinary commodity, or gold market is not a stock market where Elliott wave principles work better. The main gold price indicator will be "real interest rates" for the coming months because GOLD is a currency (at least it has started to behave like a currency). FED can increase short term interest rates, as a consequence real interest rates, whenever it wants. This will mean an inverted yield curve and depression. But this time GOLD demand will increase as a result of rising default risk, it is a two-edge sword.

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