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Gold prices continue to consolidate inside a range covering about $1200 to $1295. The Elliott Wave model we are following hints that we could see an eventual breakout above $1295, though it does call for some continued range bound trading until a triangle pattern terminates.
According to the model, I am showing gold prices are grinding sideways in a ‘B’ wave triangle. We are a little more than halfway through this triangle as the market trades higher to complete the ‘d’ wave. So long as gold prices stay between $1204 and $1295 the triangle pattern is the preferred pattern we are following.
Once this triangle exhausts, then we will anticipate a breakout higher above $1295. Once we get closer to the end of the triangle, we can identify some potential targets to the upside. Therefore, as a trader, we want to position in the direction of the trend and look for buying opportunities.
To learn more about trading Elliott Wave triangle, view this hour long webinar recording solely covering the triangle pattern with a free registration.
In the meantime, shorter term traders may recognize the impulse pattern developing from the July 9 low. It appears we are in the final stages of that small impulse and a correction lower towards $1235-$1245 may be nearby. We anticipate the correction lower to be a partial retracement of the July 9 up trend. That correction, if it develops, may offer interested long traders an opportunity. The key level to the bullish bias is the blue wave ‘c’ low near $1204.
The IG Client sentiment reading for gold is at 2.89. The number of traders net long gold have decreased since the beginning of July. This could be a subtle clue for bullish traders as the sentiment reading has been dropping from even more extreme levels. Follow this live reading and learn how to trade with sentiment at this link.
Bottom line, we are anticipating gold prices to find some support and bounce closer to the $1295 ceiling.
This is a shorter term outlook for gold. Read our quarterly gold price forecast to see what may be influencing the longer term cycles.
—Written by Jeremy Wagner, CEWA-M
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