There is currently a possible triangle pattern in play for Gold. We do not see the same pattern for Silver, but we can watch Gold for clues on which way it will breakout. We could see a breakout to the upside or downside. Gold is close to the lower trendline so a bearish breakout to the downside would be close. Gold must remain above 1685 for the bullish triangle pattern and 1672 for a possible larger correction. A break above 1715 and 1725 would suggest the breakout to the upside, but a move above 1755 would confirm it.
We also identified a triangle pattern for Gold in Dec of 2007 which broke out to the upside while the markets continued lower after topping out in Oct of 2007. See the Dec 2007 newsletter on Gold. Dec 18th 2007 - Elliott Wave Analysis and Forecast for Gold
Our newsletter from Sept 25th 2012 illustrates two bearish Ending Diagonal patterns for the DOW. The completion of the first ending diagonal pattern accounted for the Oct-Nov 2012 decline in the markets. There are still the consequences of a larger ED pattern ahead. Refer to the Sept 25th 2012 Newsletter for more details. Sept 25th 2012 - Elliott Wave Forecast and Analysis for the DOW
We could see the same divergence with the metals and the DOW that occurred in 2007. A break to the upside in Gold would likely correspond with a sharp decline in the markets.
It appears that wave (E) is completing now, but we could see further corrective action in a larger pattern as wave (D) up. This why we need to see it move above the wave (B) high (1755) to confirm. Even if we did see a larger pattern evolve, this chart should make it clear to monitor and determine which way its going to breakout.
We can also count the decline as a number of wave (2)'s which is bearish, so the longer Gold stays above 1685 the better for the bullish outcome.
These charts are only a guide so that you can follow the action and monitor the expected outcome. The action could play out exactly as illustrated or it may need minor adjustments as we follow it through.
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To learn more on the status of Gold, Silver, HUI and the USD, please visit the link below for registration details. The commentary and forecasts are updated daily, including intraday commentary and chart updates. Fibonacci pivot dates and cycle analysis are also utilized to forecast reversal dates. The indices covered include the NASDAQ, DOW, S&P 500, SOX, Nikkei, DOW Transports, TSX, BSE, KSE, AORD, HSI, DAX and FTSE. Commodity charts include Copper, XOI, Crude Oil, Nat Gas, Gold, GLD ETF, Silver, SLV ETF, HUI and/or the XAU (Gold and Silver index). Additional Elliott Wave charts cover the US Dollar (USD), EURO FXE ETF, Canadian Dollar (CAD) FXC ETF, 10 Year Treasury Note Yield (TNX), Bank Index (BKX)
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