Gold Quickly Closing In On $1,000 Again

As many of us have been suspecting, gold is on a steady pathway up to retest and likely exceed the $1,000 per ounce level which has served as substantial resistance in the past.

Let’s take a quick look at gold’s Daily chart structure to see this happening as it unfolds.

I have labeled a small, fractal Elliott Wave count, showing the move from the February highs of $1,000 to April lows at $860 was a three-wave “ABC” Corrective move which ended at confluence support.

Price has now moved in a ‘1,2′ wave pattern and now appears to be completing a 3rd wave fractal move up which could push us the $20 we need to hit that magic “$1,000″ level yet again. Even if we find resistance again at the $1,000 level, if the Elliott Wave fractal I’ve drawn is correct, then the 5th wave fractal (which could be part of an even larger impulse) would be expected to take us above that level.

I previously discussed this very possibility which is occurring now in last week’s “Comparison of the Dollar and Gold” post. I also wrote a post that provided a link to download Robert Prechter’s (of Elliott Wave International) 40-page e-Book on the Gold and Silver Market which is worth a read.

Adam Hewison also gave a brief video update on May 21st simply entitled “Gold Update.”

This time we’ve built a base, and a few readers have even pointed out the potential “Inverse Head and Shoulders” pattern which is bullish and gives us a price projection of roughly $1,160 (that’s taking the head to the neckline and then projecting upwards off the neckline).

In other technical notes, we have a clear and confirmed positive uptrend in price as evidenced by recent higher highs and lows as well as the ‘most bullish’ orientation possible of the 20, 50, and 200 day moving averages (which is even clearer on Gold’s Weekly Chart).

It’s also possible that we’re in a large-scale Bull Flag on the Weekly Chart, but I may try to discuss more on that later.

In the event that gold fails to move up to $1,000, watch the $920 level for initial potential support (EMAs) and then the $860 level (prior support three times) to see the reaction off this level.

Let’s keep watching this as additional clues come in to the markets!

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