Gold

Gold’s New Rally to All-time Highs Continues

Last week, see here, when GOLD continues contract was trading at $1836, I was looking for a “top shorter-term around $1860, drop to $1745-90 before rallying to $2045-90.”

Today GOLD is trading at $1868. Thus, so far, so good. Ideally, the precious metal should top soon, fall back to around $1800-1765 support before rallying to ideally $2100-2200. See Figure 1A below. However, the late March low rally is a bit ambiguous upon further and more detailed inspection and could see GOLD rally as high as $1965 before seeing the more significant wave-2/b decline. See Figure 1B below.

Figure 1. GOLD daily charts with detailed EWP count and technical indicators.

Chart

Description automatically generated

Drop now or later. How to know the difference?

If the Gold Bugs can hold the precious metal’s price above last week’s low (green minor wave-4 in Figure 1A and grey minute wave-iv in Figure 1B) at $1808 on any pullback, then the Elliott Wave Principle (EWP) option shown in Figure 1B becomes operable. That pullback would then be green minor-4 of red intermediate-iii of black major-1/a. If the price closes below it, then GOLD is making a lower low, will close below its rising 10-day and 20-day Simple Moving Averages (SMAs), and the technical indicators -such as the MACD, FSTO- will most likely switch from the current “buy” to “sell” sell.

Bottom line. With price now having broken out from the (grey) downtrend channel it has been in since the complex correction started late July last year and moving back above its SMAs, including the 200-day SMA (see green arrows in legend), it is apparent a new uptrend has started. But as described above, it is now a matter of the finer details on how this uptrend will unfold. I prefer the option shown in Figure 1A, but beggars cannot be choosers, and as always, I will let the market tell me which path it will choose. A break and close below $1808 from current levels will present an excellent low-risk buying opportunity, while if it holds, one can ride GOLD to at least the mid-1900s.

For a look at all of today’s economic events, check out our economic calendar.