Gold after reaching our target of 1,294, has been sliding downwards towards 1,274 forming until now a three wave move from 1,298. According to our Elliott wave analysis, this could very possible be wave 4 of wave C up from 1,208. Prices are now near the upward sloping trend line support and this bullish scenario is still valid with 1,340 as target.
For this bullish scenario to be canceled, prices will need first to break below the blue upward sloping trend line at 1,270 and then overlap wave 1 high at 1,259. If these two conditions are met, then it will be condirmed that wave C up has finshed and a new downward move starts. From the beginning, we were labeling this upward move from 1,208 as another bigger degree correction. That is why we also mentioned that the longer-term trend remains bearsih, despite the short-term trend has changed.
Concluding, Gold has resistance at 1,298 and support at 1,270. Breaking either level will accelerate towards that direction. If support is held, bulls will need to break above 1,298 in order to reach 1,340. If support is broken, then expect a downward impulsive move to first test 1,259 and then 1,200. We remain bullish as long as prices trade above 1,270 with 1,298-1,340 target.
