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Gold prices touched 1183. Now what?

Gold touched the important support level of 1180 for the third time in the last 16 months. How long can traders and investors expect it to hold the bears’ strength?
In our previous analysis of gold prices, called “Price of Gold below 1200 next week?” and published on 27th September, we stated, that a decline below the mentioned figure is very likely, because we suspected a triangle under construction in wave 4 of (3)/C and triangles are continuation patterns. Here is how the chart of the yellow metal looked like back then.
gold prices 27.9.14
As you can see, we were expecting prices to gravitate around 1218 for a while, before turning lower for wave 5. The next chart shows what happened with gold prices after that forecast.
gold prices 7.10.14
The triangle wave 4 managed to hold the bears’ onrush, but not for long. Soon gold began the sell-off we expected, which led its price to 1190 on Friday, 3rd October. The weakness continued on Monday, when 1183 has been reached. However, the bears could not go any lower and gold prices bounced up to 1212 as of today. This leap did not came as a surprise for the Elliott Wave analysts, who know, that triangles precede the last move of a larger sequence. This means that the whole wave (3)/C is probably over. Furthermore, the length of wave (3)/C is exactly 261.8% the length of wave (1)/A, which is a very typical Fibonacci Ratio between first and third waves. Fine, but now what?
If this is the correct count, the rally, which is currently in progress, is likely to extend. The only question is how high. If the three-wave decline from 1345 to 1183 is (1)-(2)-(3), then we should expect wave (4) now, which would usually end in the area of the previous wave 4 – around 1230 – before the downtrend resumes in wave (5). The less likely scenario suggests for a much larger recovery, if we have an A-B-C decline, instead of (1)-(2)-(3). The reason why we prefer the first option is our big picture outlook.

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