Elliott Wave Analysis: GOLD Trading In A Flat Of A Higher Degree; More Weakness In Wave C Is Expected To Follow
GOLD is turning down sharply for the last few weeks with increasing bearish momentum, so we see metal now making an impulsive drop from the highs. However, despite a five wave decline we still see market in temporary bearish movement since we are tracking a flat correction in wave II. That’s a 3-3-5 structure that occurs against previous five wave rise that we can count up from 1046. That said, we remain bullish on gold and think that uptrend could resume later in June.
On the lower time frames, Gold keeps falling sharply which now looks like an extended five wave drop from 1288 so whole decline from 1303 is probably impulsive. As such, we are now looking at wave 3) that can be looking for a support now around 1200-1210 for a short-term recovery back into wave 4). However, this whole decline since start of May is not a new bearish cycle, but rather wave C as part of a corrective flat pattern as shown on the daily chart.
A Flat is a three-wave pattern labeled A-B-C that generally moves sideways. It is corrective, counter-trend and is a very common Elliott pattern.
Basic Flat Pattern:
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