Gold Is NOT A Safe-haven; Now Headed Below $1530

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Commodities are trading lower this week, while the US dollar is rising sharply after a reversal lower of equities.  One of the very weak markets is also gold, which definitely does not have a status of a safe-haven at this point of time.

In fact, if we take a look on the intra-day sub-structure from 1641 high, then we can see some sharp bearish moves, which seems to be an impulsive pattern, but likely incomplete.

From an Elliott Wave perspective, we believe that yesterdays sharp decline was wave three, so any bounce in the near-term will be only another corrective leg; wave four of an impulsive. We know that impulses are structured by five sub-waves, so more weakness is expected after a minor pull-back, ideally from 1565.

Our downside price objective is at 1530/1520; September lows.

Gold Elliott Wave Analysis December 29 2011

And below is a short description that our subscribers received on Dec 21st 2011:

  • Gold reversed nicely in the past few sessions, in-line with our expectations, from around 1640 area. A minor fall from the top has an impulsive shape, so we think that top is in and that prices should move lower, especially as market is already trying to break out the support channel line. But to get even more sure about the “top in place”, you may also wait on a daily close price action. But in either case, if wave 4 done, then we don’t want to see price back above 1642.

Gold Elliott Wave Technical Analysis December 29 2011

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About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

5 Comments

  1. Pingback: Gold Is NOT A Safe-haven; Now Headed Below $1530 | Forex news

  2. Hai Yohai… Thanks for the opinion…. I am your fan and always open your blog everyday read all your post.

    Why don’t you have daily and weekly gold and silver forecast like forex as well?

  3. yea its going down all right…all the technical vudo and support/resistance blah blah can never trump supply and demand stats and short contracts on spot gold and silver is at record low levels…if you cant short and sell something you dont have…most likely will go up?

  4. any chance of dip is a opportunity…you can fiddle with the short/middle term directions of price but in any debt-base fiat system of economics, all good/bad (debts) will come to an end. just that simple, inflation is inherit in system, always, no matter how much they tell you asset price destruction is around the corner, monetary expansion is a given.