In our previous analysis of gold we showed you the following chart, saying that “wave 4, if a triangle, may still be under construction”.
On the next chart you can see that wave 4 really did develop as a triangle, after which wave 5 to the downside completed the whole impulse.
According to the Elliott Wave Principle, after every impulse we should be expecting a correction in the opposite direction. The above chart suggests that such a correction is in progress, since gold rose from 1277 to 1292. With the next chart we will look into the wave structure of this rise, in order to determine, if the trend has really changed its direction temporary.
As visible, on the 5-minute chart of gold we have a five-wave impulse pointing to the upside. It looks like we are currently in the corrective wave “b” down, after which wave “c” up should be expected. All these price swings fit perfectly into our bigger picture analysis, so we are going to stick to it for now. Once this a-b-c zig-zag pattern is finished, we will have to prepare for another decline in wave 3, which can lead prices near 1250 or lower.
