FX.co ★ Gold Elliott wave analysis for October 3, 2013

Gold has found support in the Head-and-Shoulders neckline at 1,280 and has made an upward bounce above 1,300 yesterday. The upward move from the lows is most probably a corrective bounce after the sharp decline from 1,351 to 1,276.

Gold is currently in an uptrend, but we feel that trend is going to reverse soon downwards. Short-term support is found at 1,309,1,305 and 1,290. Short-term resistance is found at 1,330 and 1,350. We favor taking short positions when support at 1,305 and 1,290 is broken and will certainly add to short positions if the neckline at 1,280-72 is broken and the downward target of 1,140 is confirmed by the H&S pattern.

Bulls, on the other hand, will need to break above 1,355 and break above the downward sloping trendline that is connecting the lower highs from 1,433. Concluding we remain neutral expecting the trend to reverse down again. Once a sell signal is triggered we are going short. Until then we remain neutral. Major bearish signal if prices break below 1,272.