FX.co ★ Gold Elliott wave analysis for October 21, 2013

Gold prices remain near their recent highs at 1,327. The upward move from 1,250 looks impulsive, and we may need one more new high to complete the 5 waves up from the lows. Short-term support is found at 1,318 and short-term resistance is found at 1,333. If prices reach the resistance, then this could be the end of the move. If prices break below 1,318 then the 5 waves are completed, and we should see a pull back towards 1,300-1,290 for a back test of the broken trendline.

Gold has very important long-term support at 1,250-70 and long-term resistance at 1,375-1,433. As long as gold is trading above that important support, there are increased chances that the resistance at 1,433 will be challenged and if broken, then prices could reach even 1,500-1,600.

On the other hand, if prices break below the 1,270-50 support, then we should expect new lows below 1,180 to be seen. Our target, if prices break below 1,250, is the 1,080 price level, which also is the 50% retracement of the multi year rally in Gold prices. Concluding we prefer to stay long in the short term, as long as prices trade above 1,318 and with 1,330 as a target. Our bigger picture expects prices to make a move towards 1,300.