FX.co ★ Gold Elliott wave analysis for July 15, 2013

Gold held its support levels on Friday and was trying to make an upward break. As mentioned in previous post, first target at $1,294 was achieved. Next target is at $1,340. It seems the prices are moving upwards in an impulsive pattern, which most probably is wave C of the upward corrective move that started at $1,208.

We expect wave 5 of wave C to complete near our $1,340 target. Support is found at $1,266 and as long as prices trade above that level, it is very possible to reach the upper boundaries of the channel as shown in the chart above. Breaking the $1,266 support, the wave count will have been completed with a truncated 5th wave at $1,289 and in the long term downward trend will be resuming.

As shown in the 1 hour chart above the wave count is inclomplete. Support is held and the upward trend line, the first support level is not broken. Breaking below $1,280 will not be something good for bulls, but the important level for this wave count remains at $1,266. We are cautiously bullish as we believe that eventually prices will break above $1,290/98 resistance area and head towards $1,340. Stop for bulls is the $1,266 low.