Spot Gold has climbed steadily since 22 December 2009 low of $1075/oz. Gold had declined about $150 since the early December peak at $1225/oz. The decline was due to fear of Dubai debt and profit taking as a correction was due. As mentioned in my previous article, Abu Dhabi stepped into rescue and provided Dubai with a huge $10 bln bailout.
Now moving over to Gold’s technical outlook, little has changed since my last update. My buy zone of 1100-1125 was very decent considering the bottom being $25 away. So now what is the big questionon everyones mind? It is obviously confusing if we look at technical patterns and compare it with seasonal patterns. Technically the current pattern is supposed to be bearish – A sharp dip followed by a fake rally with another down move.
However, seasonal patterns show us the complete opposite. Historically the month of January has been a very sideways month for Gold with February and March being extremely bullish. Considering this pattern to occur again Gold could easily surpass $1200 and challenge $1300 by March.
The seasonal pattern has the bias over technical pattern because fundamentals are more stronger than technicals. Also, after the great performance of Gold last year and gaining popularity as the next bull market, there would be many huge portfolios being adjusted with more weight given to Gold.
Looking at the Chart now, Wave IV met its end at $1075 on 22 December last year. We are now in the early stages of wave V and the rally should be accelerating next week or early February. Those who are in buy from my suggested buy zone should move their stops to 1100 since any move below 1100 could open up the way to the previous all time high of 1030. Another interesting fact here is that the length of wave A) is equal to wave C) which increases the confidence in this count.
Summing up, Gold is bullish above 1100 and we are in the early stages of a massive Wave V. Moving above 1180 would certainly bring momentum back in this market and Gold will shine yet again.
Please get your Elliot wave theory in order.
a,b,c correction as depicted is too short a time frame for adequate correction.C will take shape in the ensuing weeks.
There is no hurry to buy Gold when Dollar is just starting its second wave up. Gold will likely move under 1000$ which will be the appropriate time to enter.
I do agree with further upside for gold, but its not ripe yet!
Josh is correct.. your analysis is dead wrong and your wave count is off. Gold at 1113 today so that breaks the chart. Down below 1000 is the first target, then a rally, then MUCH lower.
I might go up or it might go down. Period.