Gold - Perspective of large timeframe
Updated
After surpassing its previous ATH of 2011, gold has been in an uptrend.
Normally in technical analysis, if price breaks out of its base, especially large base like we have seen in gold, there is a saying "the larger the base, the higher in space".
But, how high?
Price target with Fibonacci level
Typically the target set by using fibonacci projection would yield the target at the following level:
1.618
2.618
and 4.236
Since price wouldn't move in straight line, one should expect resistance along the way.
Between the previous all-time-high (fib level 1.00) and 1.618,
the significant resistance level can be expected at 1.236 and 1.382 level
(happened so many time for each instrument in any timeframe)
Looking at chart right now, gold met its resistance right at 1.382 level around ~2420.
Deep correction vs sideway correction
When met with resistance, the instrument either resolves it through
1) price (fast, deep price correction) or
2. time (frustrated sideway correction)
So, theoretically speaking, gold should be heading to at least 1.618 fib target of 2011 ATH
at ~2800 usd eventually.
Elliott wave perspective
I won't go into the very detailed wave count, only recent price action during covid.
From here, if the uptrend is valid, there should be 5 wave up.
Now, I counted 3 waves up and then gold hit 1.382 level at 2420. Since then, it as been moving sideway.
From the chart you can see that the 2nd wave corrected for 72 days, and now assuming we are in the triangle 4th wave, we price has been correcting for 76 days.
According to the wave theory,
1) Triangle can occur as 4th wave
2) Wave of the same degree should be similar in size (time it takes in correction)
The correction may be over and the 5th wave is underway with price target around 2,750 - 2,800
Other consideration:
Expect some selling pressure at ~2550 since we have some fibonacci confluence zone around that level
Short term invalidation point is if price break below 2290
Normally in technical analysis, if price breaks out of its base, especially large base like we have seen in gold, there is a saying "the larger the base, the higher in space".
But, how high?
Price target with Fibonacci level
Typically the target set by using fibonacci projection would yield the target at the following level:
1.618
2.618
and 4.236
Since price wouldn't move in straight line, one should expect resistance along the way.
Between the previous all-time-high (fib level 1.00) and 1.618,
the significant resistance level can be expected at 1.236 and 1.382 level
(happened so many time for each instrument in any timeframe)
Looking at chart right now, gold met its resistance right at 1.382 level around ~2420.
Deep correction vs sideway correction
When met with resistance, the instrument either resolves it through
1) price (fast, deep price correction) or
2. time (frustrated sideway correction)
So, theoretically speaking, gold should be heading to at least 1.618 fib target of 2011 ATH
at ~2800 usd eventually.
Elliott wave perspective
I won't go into the very detailed wave count, only recent price action during covid.
From here, if the uptrend is valid, there should be 5 wave up.
Now, I counted 3 waves up and then gold hit 1.382 level at 2420. Since then, it as been moving sideway.
From the chart you can see that the 2nd wave corrected for 72 days, and now assuming we are in the triangle 4th wave, we price has been correcting for 76 days.
According to the wave theory,
1) Triangle can occur as 4th wave
2) Wave of the same degree should be similar in size (time it takes in correction)
The correction may be over and the 5th wave is underway with price target around 2,750 - 2,800
Other consideration:
Expect some selling pressure at ~2550 since we have some fibonacci confluence zone around that level
Short term invalidation point is if price break below 2290
Note
There is a resistance of fib level 2.00 around 2325.
If price can decisively close above 2325 I think gold will continue its uptrend.
Note
Price action looks promising...
Let's see how it turns out
Note
Wave 2 is finally over, imoshould move up now
Note
The correction should be almost over now, confirm when price go above 2336 or below 2318
Note
Nice!
Expect the resistance around 1370s
Trade closed manually
I’m adjusting the wave count. I think this looks more promising. I’m looking to go long again if price stabilize around 233x
Note
So, the D wave is probably a flat 3-3-5. and now this should be the last corrective wave E
Note
The large resistance should be around 2530-2550
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