FX.co ★ Gold Wave analysis for July 16, 2014

The Gold price has broken the bearish flag we noted yesterday and made a clear break below support of $1,300. The Gold price has most probably completed 5 waves down at the 50% retracement. The trend remains downwards. A pull back up is possible but the main view is bearish.

The Gold price has made an impulsive downward move. There is high probability of having 5 waves complete from $1,346 at the 50% retracement of the rise from $1,240. Since 5 waves down are complete, we should expect an upward 3 wave bounce and then another downward impuslive move.

If we hold above the recent low, we should expect a bounce towards at least the 38% retracement of the decline from $1,346. The most possible target for a bounce is the Ichimoku cloud resistance that coincides with the 61.8% retracement at $1,322. Wave E is most probably complete and we are at the early stages of a new downward move that will push the Gold price towards $1,000. I've been calling for a wave E top near $1,340-50 for a long time. It seems that the Gold price is moving according to our plan and analysis.