The last time we wrote about gold was February 17th in an article, called “Gold Bears Ready For The Last Fight”. The yellow metal was trading around $1220, while we were expecting the decline to continue. The chart below shows what the Elliott Wave Principle was suggesting almost two months ago.
As visible, we were bearish on gold, because there was a very clear five-wave impulse to the downside, followed by a three-wave a-b-c retracement to the upside. Exactly one month later, on March 17th, the price of gold fell to $1142. However, the bears could not hold the momentum, which led to a recovery of more than 80 dollars. Yesterday, on April 6th, the precious metal reached $1224. Apparently, the bears are still struggling. Let’s see how the battle looks like now.
As the updated chart shows, the bottom of wave (a) has not been taken out yet. This means we should still expect lower levels. In order to gain more confidence in this idea, we will take a closer look at the price action following the top of wave (b).
As it turns out, gold has drawn another 5-3 wave cycle to the south. It it is smaller than the previous one, but it brings the same consequences. If this is the correct count, we should prepare for another sell-off, because the bulls are likely to be on the losing side again.
