Gold's last leg lower might have started
Gold (XAUUSD, GOLDFEB15) has been in a bearish trend since 2011, a trend that appears set to continue. I am working under the assumption that the overall decline is corrective in nature, with a three wave decline into the June 2013 low, with that low followed by what I interpret as an X-wave triangle which should be followed by at least another three waves lower.
So far we've had one leg lower followed by a three wave bounce. Ideally I would have liked to have seen the price move towards the 1250 level, which was the fourth wave of lesser degree of the prior move but the market might have turned before. This could, of course, happen if the main trend is strong.
The risk to this setup is that the correction higher is set to extend, such a scenario is found at the end of the chart list below. If this setup back-fire, I am planning to make another attempt from higher levels according to my alternative scenario.
Entry: At market around 1180 USD/oz
Stop: 1220 USD/oz
Target: 1105 USD/oz and 1024 USD/oz
Time horizon: Up to three months
— Edited by Adam Courtenay
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