Gold Trying To Find A Major Bottom

The last time we spoke about gold was July 20th, 2015. In “Gold Fulfilling A Year-Old Forecast!”, we suggested the precious metal is probably getting ready for a major bullish reversal in the area around $1100. And indeed, the price of gold rose from $1077 to $1176 so far. But is this 99-dollar recovery the start of a long-lasting bull market? Could it be just another temporary correction of the larger downtrend, which is still in progress? In order to try to find the answer, we will take a look at the weekly chart of gold.
gold 14.10.15. count 1
According to this count, for the bulls, sky is the limit. It suggests that the whole corrective decline since the year 2011 is over. If so, the bottom at $1077 should stay untouched from now on. However, there is another possibility, shown on the chart below.
gold 14.10.15. count 2
On the first chart, we assumed gold has been developing as a W-X-Y-X-Z double zig-zag. Here, we accept the idea, that the decline from $1921 to $1077 is only a simple W-X-Y zig-zag correction. In this case, wave Y should consist of a smaller a-b-c zig-zag. The problem is, that, if this is the correct count, wave c of Y is incomplete. It appears to be taking the shape of an ending diagonal, whose fifth wave is still missing. This would mean the current 99-dollar recovery is just a fourth wave retracement, preceding wave 5 of “c” of Y to the south. According to this count, gold still has one more bottom left to make, before the bears finally give up. Having in mind the fact, that there is a strong resistance around $1180, this idea definitely deserves your attention.
Both scenarios seem equally probable right now, so there is no point in picking a favorite one. The Elliott Wave Principle‘s job here is to prepare us for each one of them, so we could avoid any unpleasant surprises.

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