The price of gold just reached a new all-time high and is already closing in on the $2500 mark. But it was as recently as the beginning of this month when it barely held above $2360 after plunging sharply during the mini-panic two weeks ago. What helped us keep a cool head was the Elliott Wave structure of the preceding rally.
In our Elliott Wave Pro update of gold, published on August 7th, we shared with subscribers that we “expect more upside to a new record in wave ‘c’ of iii/b), unless $2364 gives up.” That statement was accompanied by the chart below, which visualized the trading setup in question.
The setup consisted of a five-wave impulse, marked 1-2-3-4-5 in wave ‘a’, and a simple a-b-c corrective decline in wave ‘b’. This meant that the 5-3 wave cycle is complete and according to the theory, the trend was ready to resume in the direction of the impulsive sequence in wave ‘c’. Since wave “c” was supposed to exceed the top of wave ‘a’, a new all-time high looked like a natural upside target. Nine days later now, the updated chart below shows how the situation unfolded.
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$2364 did remain intact and wave ‘c’ not only reached a new record, but made it in impulsive fashion, as well. Its five sub-waves are easily labeled as 1-2-3-4-5 and the sub-waves of wave 3 are also visible. Wave 4 was a deep three-wave retracement, but it didn’t touch the top of wave 1, just as the Elliott Wave rules require. In our next Pro analysis of gold due out this weekend we’ll see where this hourly chart fits into the monthly, weekly and daily ones, and what do they all say about the future.
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