FED Hope of Easing Sparks False Rally in Gold

Just about a month ago I provided my personal assessment of gold. Elliott Wave Live: Is There Gold Still In Those Hills?

The above chart is the interpretation along with recent price action. As I stated within the previous post, "Prints above 1642.4 negate the interpretation."

A False Rally?

While my interpretation was proven incorrect, the concept of a triangular formation was not. Here's why...

At the daily chart level, I have adjusted my wave count. Readers should be able to identify the sideways movement within the chart. If you are following the rules and guidelines set forth by the Elliott Wave Principle, there is no way to label this pattern as impulsive.   Therefore, IMO, the best wave interpretation to date is an A-B-C correction with a triangle w.b circle that needs to prove itself to me by not exceeding 1707.8.


Further Evidence

Both the CBOE Gold Index and Gold Miners charts above have a shaded region that at the time of this post also exhibit possible corrective flat patterns. That would imply another move up above the June 2012 peaks. 

In conclusion, I'm not buying into this move regardless of what the FED does. I'm a possible buyer at lower levels as the larger degree pattern requires further downside as shown here. 

I hope you found this article helpful.

Best of Trading

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Fair Disclosure Notice: I do not have a position in any of the aforementioned futures markets or  securities related to this article.