The gold price made a breakout yesterday. In yesterday's analysis, I gave all the reasons why it was more probable to see a break higher than a downward move. The price was above the Ichimoku cloud and trend line support, while the crucial support levels at $1,310-15 were tested and not broken. A short-term trend remains bullish. Our target is $1,350.
The gold price is above the breakout territory and above the Ichimoku cloud. The trend remains upwards. Short-term support is found at $1,330-34 and short-term resistance is at $1,345-50. As long as the gold price is trading above $1,300, bulls will be safe. I believe we are currently in wave E of wave 4 as a part of the triangle as shown in the chart below.
If this wave count is correct, we should expect the gold price to make a top between $1,350-$1,360. This is the area where wave E should complete. This is the last wave of the triangle pattern as wave 4. After that, I expect the gold price to fall to new lows towards $1,000. The first sign that this scenario is correct will be a rejection and a reversal at $1,350-60. If the gold price breaks above that level and reaches $1,400, then the bearish scenario will have less chances and most probably will get canceled. Until then, we remain bullish for a short-term targeting at $1,350-60. This could changes if we break below $1,307.
