Gold has reached a low of nearly $1900 today. This is an important low as two different Elliott Wave patterns we are following suggest a strong rally is about to develop.
1. B-wave triangle of a larger zigzag First, today's low may be wave (b) of a triangle pattern (black labels). Therefore, wave (c) will be a rally that carries up to about $1975. After some more sideways slop, this bearish triangle would end and another strong sell off would begin taking gold below $1900 (later in July).
2. Bearish Zigzag Ended Today's low may be the end of a bearish zigzag that started at the May high. A zigzag pattern takes the form of ((a))-((b))-((c)). Wave ((c)) would be an ending diagonal (red labels). Under this pattern, a swift rally would carry up to $2,000 and possibly higher.
The RSI divergence at today's low suggests bearish momentum has slowed and a rally is about to begin.
Trade closed: target reached
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Monday's high reached the target and the risk is elevated for Gold to fall back below $1900.