FX.co ★ GOLD correction towards 1215-30

As mentioned before, Gold is making a corrective move downwards after the 1179-1266 upward move. After finishing 5 waves up, prices are now moving down correctively. Waves A and B are most probably finished and we are expecting wave C down to reach near 1225$ area.

Although prices managed to break above the downward sloping the 34 candle MA, we expect prices to fall further and back test the break out. The upward move from 1,237 feels corrective and we think that there is more downside. This upward bounce gives us the opportunity to sell closer to the bearish stop. Stop for bears is the recent high at 1,266. Wave B brought us very close giving us the opportunity to sell with a small stop loss. The target now is a new low below 1,237 towards 1,220-10.

The decline 1,266-1,237 as shown above is in 3 waves. So there is an upward move towards 1,249. We expect prices to fall and make a lower low to complete the three wave corrective pattern. As mentioned yesterday, we are turning bullish near 1,220 with a new high towards 1,280 as target. Stop for bulls the 1,179 low.