Gold is yet not our of the woods. Currently, price forming a 4th primary degree reactionary wave ,as per the rule of Alternation. We assume “e” wave withing the 4th wave might complete at $1350-1370 levels. And post that fall is expected till 1040 which would 5th primary impulsive wave. Why $1040 is an important level because its the bottom of the 4thlarge cyclical degree and also 1.618 of XA move .If price go below that level the next target would be $970 , as per the principle of Equalization which is 1 wave = 5th wave. We assume below $1241 would act as an intermediate support which is 78.6% fib level of BC triangle . Hence for the Gold lovers we assume a Dead Cat bounce till $ 1345-1370 levels. Post that prices might nosedive till $ 1068-1050.
If we go by the Fundamentals, after the shock of the Yen carry trade , we assume rising UK’s interest might create a catastrophic effect for the Gold. And looking at the Japan’s economy number we assume a massive bond buying might continue in the medium run and today Fed governor also indicated rise in the short term interest soon .We assume these news might get discounted in the few months i.e before the crowd gets in.
| Gold @ $1000-980 |
We are successfully projecting Gold price since it was $1700 and brazenly told target of $ 1068-1050 . Gold recent low was $ 1070 levels. Post that gold price swelled 80 odd dollars.
Well the current upward move was because of the few global reasons and short covering. But EW projected this targets before any global reasons. But our bearish view is not over yet , we assume Gold might further fall till $1041-1000 and below this 989 levels.
As seen from the above chart, currently the Gold price is forming iv intermediate degree within (iii) wave which is within double corrective wave (Y) . Why we are saying $ 1143-45 is an intermediate iv th wave because it’s 1=iv and iv is lower then the 1st wave bottom. Post that we are assuming fall till $ 1090-70 levels which is (i) = ( iii). And our final Y target would be $1047-1040 levels which is low of the 4th cyclical bottom and below this 1000-980 levels ( which is 1.382 of the I wave )
Nishant Bali, CMT