If you look back at some of my prior posts you'll see that gold is in the middle of an Elliot Wave 5 move at the moment. Having just broken through the high point of the previous breakout, the congestion zone it set after breakout was above the previous 12 month high, rather than below it, setting us up for the high probability of another strong move up, which I believe is starting now. A measured move within the Wave 5 has begun and is looking as though it will establish an ascending scallop formation as it continues higher. Ascending scallops are patterns you want to be in on early as once the price picks up speed its easy the have to chase the move and therefore increase your risk. So we need to wait for the move to finish before buying in if you haven't already. There are points that I would be watching for a pull back. First is round number resistance at $1600 US per ounce. The second would be at the lower level of a previous congestion zone. Incidentally this upper target is also a Fibonacci level off a trend extension, although I have not drawn that in for clarity. To play this I would be keenly watching the price action as it approaches $1600, and if we get a solid break through it it would indicate that the price will continue much high to $1750.
Comment:
Ill admit, that I haven't been very strict in drawing the measured move, given the price levels that are here, I think that this is probably the most accurate representation of it.
Order cancelled:
Looks like we have smacked our heads into the resistance level, annulling the scallop pattern. Short term the price is probably going to return to 1540 or so and we will probably get a congestion zone around this level. Keep in mind also, that 200 day moving average is a long way away. possibly we will get a little mean of mean reversion and another push once things have settled down.