FX.co ★ Gold Elliott wave analysis for September 9, 2013

Gold prices were very volatile on Friday. After reaching our 1,360 target, prices spiked upwards and reached 1,394. The resistance at 1,400 still holds and prices seem unable to break above that level.

Gold prices are expected to move lower once again as long as prices trade below the 1,400 resistance. The first bearish confirmation will come when prices break below 1,382. Next short-term support is found at 1,372 and then at 1,360. Our target will now be a new lower low towards 1,350-40. Short-term resistance is found at 1,394 and 1,400 and it is the most important one.

In the daily chart, there is evidence that as prices get near the blue upward sloping trendline, prices are supported. One more last leg down towards 1,350-40 can be seen during the start of the week, but breaking again above 1,400 will bring back buyers and a re-test of the highs. Concluding, we are cautiously bearish with 1,400 as stop. We target at 1,340-50 where the trendline is the support in the daily chart. Lower lows and lower highs confirm that the trend remains downward.