Gold Elliott Wave Projection Since 1970
By GCRU Gold News on Tuesday, July 29 2014, 00:07 - Permalink
The market movement unfolds in waves which reflects human nature that does not change. The Elliott Wave Principle is made of motive and corrective waves. Waves 1, 3 and 5 are impulse waves as they move with the trend, Waves 2 and 4 are corrective waves as they partially retrace the previous impulse move. A complete sequence is made of 8 waves: a 5-wave motive phase (1, 2, 3, 4, 5) and a basic 3-wave corrective phase (A, B, C).
There are three main reasons why I think that Wave (V) could be an extended wave:
Firstly, the extended wave is often the fifth wave in the Commodity bull market.
Secondly, a non extended Wave (V) has usually gains in Fibonacci proportion to Wave (I) from 0.618 to 1. In that case Wave (V) performance should be between 255% (0.618 x 413%) and 413% but it is already up 660% which corresponds to Wave (I) multiplied by the Golden Number (413% X 1.618 = 660%).
Thirdly, I think that September 6, 2011 was not the top as the Gold market did not yet have a mass phenomena nor herd behavior connected to all speculative bubbles; the vast majority of people do not have an idea of the current Gold price and do not look for buying Gold Metal at the moment.
Moreover, the corrective move since September 2011 high looks rather like a well organized structure corrective move than a bubble crash. In addition to technical reasons there are also many fundamental reasons for Gold to resume the bull market that I did not mention as there are already a lot of talks on the subject (devaluation of the dollar, zero rates policy, systemic public debt above 100 percent of GDP etc.)