Elliott Wave Analysis of Gold and Silver by Sid from ElliottWavePredictions.com

Elliott Wave Analysis of Gold and Silver, and an update on the British Pound by Sid from ElliottWavePredictions.com. Click on the charts twice to enlarge.

Both Gold and Silver appear to be sporting triangles in the middle of the recent downward movement starting February 28/29. Since triangles cannot appear alone in a wave 2 position, these triangles are most likely “B” waves inside an ABC zigzag to the downside. If that interpretation is correct, as soon as the wave C “thrust” out of the triangle is complete (starting April 19 in Silver, and May 1 in Gold), precious metals should rally, likely retracing at least most of the entire March-thru-present downward movement. A rally would surprise here, since the long-equity pundits have been quite busy jawboning metals to the downside, likely causing sentiment to become overly bearish. Targets for both the main and alternate counts are shown on the charts. Both the main and alternate expect similar behavior: a little bit more downward action, followed by a relief rally.

As a quick update on my last post regarding the British Pound, the April 30 high appears now to be the end of wave E black, and the choppy overlapping downward movement that followed was likely a leading expanding diagonal that ended on May 9. The burning question now is whether or not the quick abc rally through May 10 is the extent of wave 2, or if wave 2 will “extend” for several more days as an expanded or running flat before wave 3 to the downside commences. While both wave counts are legitimate, based on the tendency for leading diagonals to be deeply retraced, as well as European stocks appearing to have just started a larger bounce, my main count for the Pound moving forward is that an expanded or running flat for wave 2 pink is most likely incomplete. The week may start with a day of downward movement to complete wave B, but then, if my wave count is correct, should be followed by a surprise rally back toward 1.62. The wave 3 down after that is likely to be a doozy . .

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