I am continuing with my stubborn belief that gold is around half way into a deep retrace to pre-run-up levels. If the 2016 to present (rather weak) rally fails I think we will see prices possibly sub $600 in 2 - 4 years time.
By my count we are in wave (4) of a larger down-move. Triangles normally form before the final move in the larger degree wave (so wave 4, wave B, or the final wave X in a WXY or WXYXZ). There is significant clear space between the current price and the wave (1) extreme so this triangle could comfortably break upwards for some distance (around 4%) before reaching a point where the count would be invalidated. Still, I have cautiously taken a short position on a brake below $1217.8 (I may revise this down to $1210.6). Which hopefully keeps it clear of any rogue wicks until the descent is really underway. If the triangle breaks upwards I will reassess and likely raise my stop somewhat once a wave 1 down has formed. For now this seems like a cozy place to enter and I am targeting a 1.618 extension of wave (1) at $1174. Although I expect that should this scenario develop, an extended wave (5) is a good possibility (esp. as wave (1) and (3) are tending towards equality. In an extended 5th scenario, the low $1100s or even high $1000s could be a real possibility.
Keep in mind that the 2016 - present rally will retain a possibility of being wave 1 of a larger up move - to new all time highs - until gold has retraced below $1046.1. So another possibility - that is rather more bullish - remains in play until then. The next few months will reveal all.
By my count we are in wave (4) of a larger down-move. Triangles normally form before the final move in the larger degree wave (so wave 4, wave B, or the final wave X in a WXY or WXYXZ). There is significant clear space between the current price and the wave (1) extreme so this triangle could comfortably break upwards for some distance (around 4%) before reaching a point where the count would be invalidated. Still, I have cautiously taken a short position on a brake below $1217.8 (I may revise this down to $1210.6). Which hopefully keeps it clear of any rogue wicks until the descent is really underway. If the triangle breaks upwards I will reassess and likely raise my stop somewhat once a wave 1 down has formed. For now this seems like a cozy place to enter and I am targeting a 1.618 extension of wave (1) at $1174. Although I expect that should this scenario develop, an extended wave (5) is a good possibility (esp. as wave (1) and (3) are tending towards equality. In an extended 5th scenario, the low $1100s or even high $1000s could be a real possibility.
Keep in mind that the 2016 - present rally will retain a possibility of being wave 1 of a larger up move - to new all time highs - until gold has retraced below $1046.1. So another possibility - that is rather more bullish - remains in play until then. The next few months will reveal all.
Trade closed: target reached:
I'm quite proud of this forecast in light of just how accurate it turned out to be.