In our previous analysis of gold, titled “Gold Trying To Find A Major Bottom”, we gave you the two alternate counts we thought were most likely to develop. The second one suggested the price of “gold still has one more bottom left to make, before the bears finally give up.” Let’s take a look at the weekly chart of the yellow metal, published on October 14th.
As visible, we assumed there was an unfinished ending diagonal in wave “c” of Y, whose fifth wave down was missing. That, plus “the fact, that there is a strong resistance around $1180” made us conclude this idea deserved your attention as well. In other words, another 100-dollar sell-off could have been expected. The chart below shows how things went from then on.
Gold topped at $1190 on the very next day, October 15th, and started declining. Less than a month later, on November 12th, its price fell as low as $1074. So, the new bottom is a fact already. Now what?
If this is the correct count, wave “c” of Y is either over or near completion. In addition, there is a triangle correction in wave “b” of Y. According to the Elliott Wave Principle, triangles precede the final wave of the larger sequence. This means we have not one, but two patterns, both suggesting we should expect a bullish reversal very soon. This scenario would be confirmed, when gold prices break the upper line of the ending diagonal, which connects the tops of waves 2 and 4 of “c” of Y. The smaller time frames should be observed, if one wants to search for earlier entries.