FX.co ★ Gold Wave analysis for January 10, 2013

Gold Elliott Wave
From the beginning of January gold was trading in an upward move, impulsive (1) wave (coloured green) of the bigger (1) wave (coloured red) was developing. Yesterday during the Asian session we could observe ascending movement from 1,657.00 toward,665.85 level and we can consider this move as the end of the (1) wave (coloured pink) of the bigger 1 wave (couloured blue). Therefore, during the European and New York sessions gold did not manage to hold this level and the price started pushing lower reaching a new daily low at 1,651.35 level. We can consider this move as the end of the corrective wave (2) (coloured pink). At the moment this commodity is trading around 1,660.10 level and we expect to see the price higher today. In accordance with our wave rules and taking into account that the wave 3 should retrace 161.8% of the wave 1, we can define the potential targets with measuring wave 1 with take profit at 1,688.67 (161.8% of wave 1). To reduce the risk, we can use invalidation at 1,6651.41 level as stop loss.

Support and Resistance
(S3) 1,636.0 (S2) 1,643.7 (S1) 1,650.7 (PP) 1,658.4 (R1) 1,665.4 (R2) 1,673.1 (R3) 1,680.1

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 1,661.00 with stop loss 1,651.41 and take profit at 1,688.67 are recommended.