Gold price has made a sharp upward reversal on Friday as expected by our analysis towards our short-term target of $1,170-$1,180. This bounce has been expected since last week as the sequence of 5 waves down was completed at $1,130. The bounce is of a corrective nature and once the upward correction ends, we should see a resumption of the down trend towards our longer-term target of $1,050.
In ichimoku cloud terms, the trend remains bearish as price remains below the Ichimoku cloud although it has broken above the kijun-sen and tenkan-sen. In Elliott wave terms, the upward bounce should consist of 3 waves as this is expected to be a corrective bounce against the longer-term downtrend. This bounce is expected to be another opportunity to sell Gold.
Gold price is consolidating near its highs as can be seen in the short-term chart above. Short-term support is found at $1,169 and short-term resistance is at $1,178. Breaking either level will give a move towards $1,150 or $1,195. The form of the rise from the $1,130 lows looks unfinished. I believe we can see a move higher towards $1,195-$1,200 where the weekly resistance in Gold price is set. This back test of the break down level is something we anticipated. My longer-term view remains bearish with $1,050 as a target.
