FX.co ★ Gold Wave Analysis for December 12, 2012

Gold Elliott Wave

Since our last analysis Gold was trading in a downward move, corrective (2) wave (coloured green) of the bigger (1) wave (coloured red) was developing. Yesterday during the European session we could observe descending movement from 1,714.33 level toward the 1,704.72 level and we can consider this move as the end of the 2 wave (coloured blue) of the bigger (3) wave (coloured green). Therefore, during the New York session this commodity did not manage to hold this level and the price started pushing higher reaching a 1,712.18 level. At the moment Gold is trading around 1,714.80 level and we are expecting to see the price around 1,760 level soon. 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 1,761.21 (161.8% of wave 1). To reduce the risk, we can use invalidation at 1,683.53 level as stop loss.

Support and Resistance

(S3) 1,696.7 (S2) 1,701.3 (S1) 1,706.5 (PP) 1,711.1 (R1) 1,716.3 (R2) 1,720.9 (R3) 1,726.1

Trading Forecast

Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 1,715.00 with stop loss 1,683.53 and take profit at 1,761.21 are recommended.