In our previous article about gold we showed you two alternative counts – one bearish and one bullish. Shortly after that, gold broke under 1292, thus eliminating the bullish one. However, this breakout turned out to be a fake one, because gold recovered by more than 20$ from 1287 to 1308 so far. If we examine the decline from 1325 to 1287, we will see, that it is not impulsive, so it cannot be labeled as wave (C). This means that gold is still in some kind of a wave (2)/(B) correction. The question is what type of correction will it be? There are three alternatives, all of which shown on the charts below. 
On the first chart you can see the expanding flat scenario. If the Market chooses this count, wave (2)/(B) should go slightly above the top of 1325 dollars before wave (3)/(C) begins. The second possible count is even more bearish. 
The above-shown chart depicts the so-called running flat. The only difference between this type of correction and the expanding flat is that wave C does not reach the top of wave A of the pattern.
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In other words, if the Market decides to go with this count, 1325 should stay untouched. The third alternative is the triangle, which most of you are probably very familiar with. 
Triangles precede the final movement of the larger sequence, so according to this count, the presumed triangle could be only wave (B) of an (A)-(B)-(C) zig-zag. Another irritating characteristic of this pattern is that triangles are very time-consuming. As you can see, in this case we will have to wait for waves D and E to form before wave (C) starts at last. In conclusion, all three counts are pointing down for gold, only the path is a little different. At this stage, the invalidation level for all three alternatives is at the top of 1345$. As long as this level holds, we will stay prepared for one of these bearish counts.
