close icon

In Gold ‘s Elliott Wave Footsteps from 1200 to 1350

Gold bulls can be very pleased with their progress in 2019 so far. Three days ago, the precious metal climbed past $1346, bringing its total year-to-date return to 5.2%. Furthermore, gold is up 12.6% from its mid-November low at $1196.

“Uncertainty” is once again the usual reason people use to explain gold’s surge. Trade war uncertainty, flattening yield curve uncertainty, slowing economic growth uncertainty, you name it. But do traders really need to care about all those things in order to predict the precious metal’s advance?

Elliott Wave Analysis of Gold as an Alternative

We don’t think so. The next six charts show that Elliott Wave analysis is more than enough to put you ahead of the next major move, even if it spans three months.

Gold traded near $1200 three months ago

Our case study starts with the 4-hour chart of gold we sent to our premium subscribers before the market opened on Monday, November 12th, 2018. After examining the weekly and daily charts, which are also included in our analyses, we thought the bulls were not done yet.

We labeled the three-wave recovery from $1160 as waves A, B and 1 of C, which meant the pullback from $1243 must be wave 2 of C. Second waves often terminate near the 61.8% Fibonacci level, which in this case coincided with the support line drawn through the last two lows. Hence, we expected a bullish reversal for the start of wave 3 of C to the north.

Price of gold makes bullish reversal

Less than two weeks later, by November 26th, gold had already bottomed out at $1196 and was trading above $1223. Then, our clients received the above-shown chart with the opinion that “the bulls remain on the wheel as long as gold trades above the bottom at $1196.

With the Big Picture in Mind

Regardless of the fact that numerous pullbacks were practically guaranteed to occur during wave 3, the overall outlook was going to remain positive in the coming months, unless $1196 gave up. Twenty days later, there was still no reason to for pessimism.

Gold keeps climbing as predicted by Elliott Wave analysis

Our clients received this chart before the market opened on December 17th. As visible, we though that even though a new high has been reached, there was still plenty of land left for the bulls to conquer in wave iii of 3. Besides, the chart allowed us to identify a new invalidation level at $1211.

Twenty more days later, gold was hovering near $1285 following a surge to the vicinity of $1300 in the first days of 2019. This meant gold had entered a sequence of fourth and fifth waves within wave 3, as shown by the chart below, sent to clients on January 7th.

Gold reaches $1300, but remains in an uptrend

The third wave is usually the longest wave in an impulse pattern. Since there have been no significant pullbacks between $1233 and $1298, we labeled this move as wave 3-orange of iii of 3. So, it made sense to prepare for a couple of fourth and fifth waves within wave 3.

By January 28th, when this chart was sent to subscribers, gold was already trading above the psychological mark of $1300. Wave 4-orange took a while, but it stayed safely above the top of wave 1-orange at $1251, so the bulls were still in the driving seat.

Finally, Wave 3 in its Entirety

In the end of January, wave iii of 3 was almost over. A pullback in wave iv followed by another rally in wave v were supposed to complete wave 3. On February 20th, gold exceeded $1346. The updated chart below shows how a complete third wave looks like.

Wave 3’s 150-dollar journey to the north took a little more than 3 months. There was no way to predict the exact length of its impulsive sub-waves, nor the exact depth of its pullbacks.

However, knowing how wave 3 should develop allowed us to track its progress and stay ahead of the next phase in its impulsive structure. That is a much better approach than trying to decipher the contradicting macroeconomic and political news, which the media produces by the dozens every day, don’t you think?

What will Gold bring next week? That is the subject of discussion in our next premium analysis due out late Sunday!

Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Silver Price Going for $19 Before Retracing to $16

The price of silver, otherwise known as a safe-haven asset along with gold, crashed sharply as the coronavirus panic swept equity markets. XAGUSD fell to $11.64 on March 18th just as investors needed a refuge the most. But the precious metal has appreciated significantly since the depths of the selloff. As of this writing, silver…

Read More »

Gold is Crashing. Elliott Wave Somehow Predicted It

Common sense dictates that in a time of crisis demand for safe-haven assets jumps. The price of gold, for instance, the most sought-after asset in difficult periods, climbed to an all-time high of $1921 shortly after the 2008-9 market crash. This time though, as the world economy is on the verge of grinding to a…

Read More »

Gold Fails as a Safe Haven Amid Coronavirus Panic

The S&P 500 was down 14.4% for the week at one point Friday on fears the coronavirus outbreak is going to become a worldwide pandemic. It is common knowledge that investors turn to gold when stocks and other risky assets decline. Last week, however, that wasn’t the case. While stock markets around the globe were…

Read More »

Silver Bears Discouraged by Fibonacci Encounter

We last wrote about silver in March 2019, when the precious metal was hovering slightly above $15. Our analysis of its 4-hour chart gave us plenty of reasons for optimism. And indeed, six months later in September the price reached $19.65. Currently, silver is trading near $17.75, up from $16.53, but still down from that…

Read More »

Gold ‘s Surge and US-Iran Have Little In Common

Gold climbed to a six-year high on rising tensions between the US and Iran following the assassination of Iranian General Qasem Soleimani. The safe-haven asset reached $1590 earlier today as #WorldWarThree started to emerge on Twitter. We hope WWIII remains just a hashtag. In the meantime, we are once again baffled by how the media…

Read More »

Gold Traders Better Off Ignoring the News

In our previous article about the precious metal readers saw how the Elliott Wave principle put us ahead of gold ‘s $72-decline from $1531 to $1459. In short, the hourly chart made us think a three-wave decline from $1555 was still in progress. Hence, the bears remained in charge and more weakness could be expected.…

Read More »

Explaining Gold ‘s Weakness With Elliott Wave Logic

Gold bulls suffered in four of the last five daily trading sessions. A week ago, on September 24th, the price of gold briefly exceeded $1535. Earlier today, it touched $1459 before recovering to $1466 as of this writing. In the meantime, global economic growth is slowing and several recession indicators are flashing red; In what…

Read More »

More analyses