COMEX Gold: Elliott wave count

Bottom line: COMEX Gold continued to fail near $1800. The short-term trend is negative.

The below excerpt is picked from  our 'Commodity Waves STU' of 18th October,2012. This report  is published everyday before market hours by Waves Strategy Advisors (www.wavesstrategy.com). To subscribe to this report write to helpdesk@wavesstrategy.com

Comex Gold Daily chart:

Wave Analysis:

In September 2008 Comex Gold has formed double top pattern near 1920 levels and fell steeply till 1525 levels. Prices have been failing to take out highs at 1800 levels over past many months.

Recently, in August 2012 prices have breached the small triangle pattern on upside, moved higher in the upward moving blue channel by forming higher tops and higher bottoms and for third time it has retested the resistance of 1800 levels. Once again prices found hurdle near the same level and drifted lower.

As per wave perspective, in front of us this corrective move has developed two alternate scenarios which are explained below:

Scenario 1: Prices have completed primary wave (A) on downside near 1525 levels in the month of January 2012 and is moving in primary wave (B) forming a triangle pattern. As long as prices fails to take out the resistance of 1800 level then it could move lower in the form of wave D till 1700-1690 levels and after wards prices could move on upside in the form of wave E of primary wave (B). Overall this will complete the primary wave (B) and once this wave is complete big leg down can start.

Scenario 2: After a decade bull run, the entire price action since August 2011 is a part of bigger triangle and prices are currently in wave E of this triangle pattern as shown in red alternate count. Once this wave E will complete the decade long bull run will resume and Gold will move well above $1900. This scenario will be preferred if 1800 mark is broken on upside decisively. This is a bullish scenario and indicates that prices should not break the support of 1670 levels on downside and eventually it should breach the resistance of 1800 level and it will give a rise of next trending move on the higher side.

In short, as long as prices move below the resistance of 1800 levels it could move lower near 1700-1690 which is recommended in both scenarios over short term. From medium term perspective, to start the next big trend it will be important for prices to break either the crucial level of 1670 or 1800 levels.

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