FX.co ★ GOLD Wave Analysis for November 1, 2012

Gold Elliott Wave
Yesterday gold was trading in an upward move like we expected, impulsive wave 3 (coloured pink) of the bigger wave 3 (coloured blue) was developing. During the Asian and European sessions we could observe ascending movement from 1,708.68 towards the 1,721.32 level. Therefore, during the New York session gold continued trading in a bullish mood and price reached a new daily high at 1,725.29 level. We can consider this move as the end of the 3 impulsive wave (coloured pink). At the moment this commodity is trading around 1,721.40 level and we are expecting to see price higher today. In accordance with our wave rules and taking into account that the wave 3 should retrace 161.8% of the wave 1, we can define the potential targets with measuring wave 1, with take profit at 1,734.83 (161.8% of wave 1). To reduce the risk, we can use support at 1,718.01 level as stop loss.

Support and Resistance
(S3) 1,697.11 (S2) 1,704.18 (S1) 1,712.31 (PP) 1,719.38 (R1) 1,727.51 (R2) 1,734.58 (R3) 1,742.71

Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 1,7230 with stop loss 1,718.01 and take profit at 1,734.83 are recommended.