GOLD!

Gold peaked towards the end of 2011 after several years of increased bullish momentum. The peak (wave 1) completed and the bearish correction started in an impulsive mood for the next 3 years and that’s where we are now.

I posted more than one times how I expected Gold to close at 1000 before the end of this year, but that idea appears to be melting as Gold is looking increasingly more bullish than bearish. 

 

 

 

With a bullish divergence on the weekly chart, wave 5 that I expected to continue might have ended anyway at just 61.8% extension of wave 1; I usually look for 100% - 127% projection ( 1000 is the 100% projection).  

 

With the price of Oil dipping, one will expect Federal reserves, Oil producers and large oil investors to leverage/protect their funds and investment by buying more Gold in their reserves which will eventually make it rally for at least a year.

 

Also as compiled by the CFTC in their weekly Commitment of traders reports which shows the position of gold traders who use futures and options. Small Traders (traders who hold positions under the minimum reporting requirements to the CFTC) are holding their biggest net short position for 15years while the Commercials are holding their biggest long position for the same period. This is a bullish indication.

 

On the 4 hour chart, there is a clear 5-wave impulsive move which looks ended and price is reacting upside. Price should continue moving upside from here.

 

Getting the picture clearer on the intraday chart, the first move of the expected bullish journey was a clear leading diagonal which gave me 500pips before price picked up to continue the move. 

 

Presently, price is getting ready for the third wave of the A (impulsive move) leg of the bullish retracement.

 

I will wait till price get to 1170-1180 (intraday support zone) before taking a decision to buy.