31.07.201311:29 Forex Analysis & Reviews: Gold Elliott wave analysis for July 31, 2013

Gold continues its sideways movement inside the triangle. This pattern after the top of 1,348 is a sideways triangle and not the downward impulsive move that we were expecting. Prices still remain inside the long-term upward sloping trend channel from 1,180 and today we post an alternative wave count that every passing day makes it more possible.

As shown in the daily chart above, this sideways movement looks like a very possible wave 4 if we assume a new upward impulsive move started from 1,180. This means that we should expect an upward break for the final fifth wave to complete the entire move from 1,180. Targets for this fifth wave are 1,360-1,380.

This does not mean that we forget the bearish possibilities. We still believe that 1,340-49 is an important resistance where prices were rejected more than once. Short-term resistance is found at 1,340 and as long as prices trade above 1,325 the chances for the bullish alternative increase. If prices break below 1,320 then bears will take over again and the bearish scenario will become the dominant again.

Concluding, we are now neutral as prices continue to slide sideways and support at 1,320-25 has been held. Whichever side the triangle breaks, we will see a sharp move towards 1,360 or 1,300.