GOLD – Short-Term Fork in the Road

3 min read
HubertM

HubertM

Author

Dear Traders,

GOLD is hovering at interesting levels, but its direction remains unclear. Today’s analysis will provide a brief update on GOLD’s price action.

3-Wave Swings Keep Many Paths Open

Gold has been moving in both directions via 3-wave swings, which leaves the door open for, both, bullish and bearish scenarios. In fact, the entire bearish move since Apr 11 is difficult to label with high certainty. There are oddities throughout the entire micro structure that leave more possibilities on the table than just a simple bearish impulse, which is why i have left the bearish swing unlabelled for the time being until things become more clear.

The chart above highlights several price paths from the current moment:

#1 (green line path): Price has continued to move in 3-wave swings since the low of 1301.70. The most bullish scenario would suggest a leading diagonal to the upside (grey trend lines). It would involve another downwards correction (as wave 2) that does not break 1301.70 anymore. In order to validate this idea, we would need to see clear bullish impulsive waves begin to form after this final bearish correction.

#2 (red line path): Scenario 2 suggests the possibility of an ending expanding diagonal to the downside (see white trendlines). This move would involve another 3-wave swing into a new low, which could test prices as low a 1290 – 1285 which also converges with an important support trend line (black). However this scenario would also be followed by a bullish motive wave, potentially taking price beyond the highs of the range that was established during previous trading weeks.

#3 Triangle: A third scenario, which is not highlighted in the chart above could be a triangle formation that has yet to complete itself. It would also result in a new low below 1301.70 before making a bullish reversal.

In any case, things would not be looking good for bulls if the black support trend line (bottom right on chart) gets broken to the downside.

All the best along your trading journey.

Hubert

Follow Hubert on Twitter

.

Leave a Reply

avatar

This site uses Akismet to reduce spam. Learn how your comment data is processed.

  Subscribe  
Notify of

🍿️ Discover your path to a 100% yearly returns over the convos with Chris Svorcik!

X