Gold continued to grind higher and sideways in what seems to be a wave 4 triangle. Support is being held and we still believe that an upward move with new highs is more probable than a new downward move. Nevertheless, we always look at the support levels and if broken, we will change our mind and take short positions. Our most probable wave count as mentioned in previous posts, sees the wave C corrective wave in its final stages. Our expected target to end this wave C is near $1,320-40.
Prices is still trading within the daily upward sloping channel and we believe that this sideways move will break upwards towards the upper barriers of the channel near $1,330. Support at $1,270 is crucial and should be held if this scenario is to come true. If prices break lower, then the upward correction from $1,208 will most probably be over with new lows expected.
The sideways move, as shown in the chart above, will soon make a break out. We favor the upside but we will respect whatever signal the market gives us. Breaking below $1,270 will signal short and we will follow with $1,285 stop. Otherwise we remain long with $1,270-66 stop.
