Quick Update on Gold by Sid from ElliottWavePredictions.com. Click on the chart twice to enlarge.
It looks like the area surrounding my last published Fibonacci target of 1589, which was arrived at based on the historical tendency of extended wave 5’s to equal the net traveled by the same degree waves 1 through 3 is not going to hold, and based on the internal wave structure of the impulsive move up since the July 1 low, it now appears that Gold is going to continue extending higher.
The July 14 high in Gold produced the high point on the 360 minute MACD, and then the July 19 higher high in Gold was accompanied by an obviously lower high in the MACD, therefore creating MACD 360-minute divergence, and an expectation of impending substantial downward movement. However, after a surprisingly puny correction to end last week, the market opened yesterday with a gap to a new high, and today (Tuesday) the MACD formed a bullish “kiss”, definitely supporting the likelihood that we’ve seen yet another wave 1 and 2 of an incomplete 1-2-3-4-5 impulse to the upside. We appear to be in the early stages of wave 3 green now.
As much as the gap higher to start the week looks at this juncture like it might be a potential island reversal, I believe that to be wishful thinking on the part of the shorters, as the subdivisions of the waves since the July 1 low simply do not support that theory. I’m therefore changing my upside target back to 1765 for now. I know that continued strength in gold is likely to influence silver, but I continue to think that, based on the extreme parabolic nature of the rally leading into the early May crash of 35%, silver is unlikely to completely recover to make new highs.
Note Added August 10: It looks like a triangle may be forming between 1780 and 1725. I’ve had my eye on a possible 1800 top, a potentially significant “psych” level for Gold, which would allow for small terminal thrust out of the triangle. Also, 1800 is where wave 5 would equal 1.382 times the net distance traveled by waves 1 through 3 (burgundy). That being said, trying to call a top for Gold has been a losing proposition for quite some time now, and I’ve lost any personal interest in either buying any up here, or shorting it either.