Elliott-Wave Gold Update 19

Corrections are often confusing and difficult to analyse. The current action in the gold price is a case in point. As has been pointed out in the past, corrections can become extremely complex.

There seem to be 2 valid counts at this time. Wave Count A below is the continuation of the count in Update 20 with a minor change in that the triangle in Small C has been discarded for a more conventional a-b-c format. Under this count the 5 wave up move from $862.2 to $986.0 (15 July 2008) would be the first minor wave in the new major up move.

In this case, the first minor correction should have been in the 4% (plus or minus 2%). The problem is that we already have a PM fix at $897.5 (30 July) which represents a 9% correction from the $986.0 peak. This magnitude is large enough to suggest that the above wave count is wrong and that Wave Count B in the chart below is the valid one.

This count places $986.0 as the peak of Small B and requires a decline in Small C to a point where one could conclude that Large Wave II is complete.

This suggests that the gold market could possibly decline to at least test the $845/$850 level.

If Small C is equal to Small A, the target for Small C would be about $830. ($986.0-$128)

If Small C is 61.8% of Small A, the target would be about $888. ($986-$98).