Gold Wave Forecast – Is Gold Going To $3750 Or Higher?

Watching Gold fall to recent lows over the past few weeks has been heartbreaking for Goldbugs. We know the real value of Precious Metals has continued to be under-appreciated over the past 24+ months – even though Gold has rallied from $1165 to over $2085 (an incredible 79%). The recent 15% decline in Gold has shaken some investors away from the longer-term opportunities, so we wanted to share our research and highlight some simple Elliot Wave structures with you.

We believe the recent downward price trend in Gold is an ideal setup for an Intermediate Wave 4 pullback of a broader Wave 3 advance. In other words, we believe Gold is in the midst of a broad advance cycle that may eventually push price levels to $5000 and above. But, we’ll focus on right now and what we believe is setting up from a Technical Analysis perspective.

The first thing to remember about Elliot Wave Analysis is that we must consider the broad market trends, the intermediate market trends, and the short term wave formations. With almost all types of Technical Analysis, we focus on different time perspectives of price trends and setups to help us better determine opportunities and outcomes.

SIMPLE ELLIOT WAVE STRUCTURES EXPLAINED

For those of you unfamiliar with Elliot Wave theory and structure, please pay attention to the example chart below. 

(Click on image to enlarge)

Generally, price advances or declines move in three basic shapes:

          (1) A straight rally or decline with no visible price corrections within it

          (2) An ABC wave formation – which consists of an Impulse wave, a moderate correction, then a final conclusion wave that reaches a new price high or low.

          (3) An ABCDE wave formation – which consists of an ABC wave formation followed by an additional moderate correction wave, then another final conclusion wave that reaches a new price high or low.

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