We will stick to our bearish view while gold trades below the 1434.05 August high.
- Over the past few month the gold price has risen in three corrective Elliott abc waves which have most likely culminated at the 1434.05 August high.
- Therefore, while no daily chart close above this high is seen, we expect the gold price to fall back to an beyond this year’s 1180.04 June low. This level could be reached by the end of this year or the beginning of next year.
- Our first downside target is the 1351.86/1321.50 support area which consists of a support line, the July high, April and May lows and the 55 day moving average. Below it lies the 1272.56 August low which is also being targeted.
- Failure at the 1272.56 August low would confirm that another interim top has been formed. In such a scenario the 1200/1100 region would be back in play instead.
- An unexpected rise above 1434.05 would void this forecast and target resistance at 1487.62/1488.17 instead.
Gold – Weekly chart
Has been capped by the 30 week moving average at 1418.03.