On November 6th, 2014, we published “Gold With More Than One Option”, where there were two charts. Both of them were showing, that after $1131, we should expect a recovery. One of the wave counts suggested for a larger advance, probably towards $1250. A reminder of that analysis is given below.
Gold was expected to rise, because the Elliott Wave Principle states, that after every five-wave impulse there is a three-wave correction in the opposite direction. As visible, there was a complete five-wave decline from $1345 to $1131. That’s the only reason why we assumed a larger move to the north. However, as it turned out, we were not bullish enough. Gold managed to climb higher than the anticipated $1250. On January 22nd, 2015, the price of the precious metal touched $1306. Nevertheless, this did not change the count at all, because the invalidation level for the above-shown scenario was still safe at $1345. So, the recovery from $1131 to $1306 was really impressive, but it was still in only three waves and still just a wave (b) correction. On the next chart you will see the whole path the price of gold traveled since that forecast.
Last week, gold fell to as low as $1216. We think this 90-dollar decline is the beginning of a larger wave (c) sell-off, which is supposed to extend below the bottom of wave (a). Having the big picture in mind, we believe $1100 is still on the table and the bears will probably go for it.
