Gold has been doing great recently. The precious metal rose to as high as 1316 and having in mind the rally initially began from 1046, it is no wonder last week’s pullback from 1316 to 1276 was looking like a good ”buy the dip” opportunity to most people. Unfortunately, the price of gold tumbled even more instead. Currently, it stands around 1267, after recovering from 1261. Well, it is in the past now and searching for reasons why gold fell is quite pointless. The only important question is could gold’s decline be predicted and if yes, how could we predict and prepare for the next time something similar happens?
This Monday, June 20th, our premium clients received the following forecast, based on the Elliott Wave Principle, which undeniably proves that gold’s plunge could be predicted on time.
As visible, we were able to count the advance from 1200 to 1316 as a five-wave impulse. According to the theory, every impulse is followed by a three-wave correction in the opposite direction. When the markets opened on Monday, the decline from 1316 did not have the necessary structure. Its wave ”c” to the south was still missing, so we were expecting it. That is it. The chart above, combined with some Elliott Wave knowledge, was just enough to prepare for more weakness in the price of gold this week. In addition, the Wave principle provided a specific invalidation level at 1316, which, if breached, would have told us we were wrong. The updated chart below shows how thing went.
We could hardly ask for a better outcome. 1316 was never touched, while a new swing low was reached. The Wave principle once again demonstrated its ability to give great results, if applied properly. All traders need is right in front of them on the charts. They just have to read it correctly and results will come. However, mastering Elliott Wave analysis is not an easy task. Do you have the patience?
What to expect from now on? Is gold going to continue even lower or the support near $1260 would turn out to be too strong for the bears to breach? Prepare yourself for whatever is coming. Order your Elliott Wave analysis due out next Monday at our Premium Forecasts section. Stay ahead of the news in any market with the Elliott Wave principle.