02.08.201312:25 Forex Analysis & Reviews: Gold Elliott wave analysis for August 2, 2013

Gold has broken downwards as expected. Once the trend lines were broken, the downward move was only a matter of time to arrive. In yesterday's analysis we also mentioned that we would add to short positions once 1,301 was broken with 1,286 as the first target.

Trend is down both in short and longer term. Intermediate-term trend is challenged at 1,260. We expect the downward move to continue lower and challenge the intermediate support levels. The impulsive move down from 1,340 is a great sign for bears and a confirmation of our view that the upward corrective wave from 1,180 has finished at 1,348.

The longer term upward sloping trend channel was broken. This is a negative sign for bulls and the bullish alternative. The sideways move that was forming a triangle was broken downwards. The next important level to watch out is 1,260 that will cancel the bullish alternative wave scenario. This scenario has diminished chances, but as long as prices trade above 1,260 and there is no overlap, there will be still some small chances. Nevertheless, we have the bearish scenario as our primary choice as mentioned for so long. Our stop for our bearish position is 1,330 now and for short-term traders this stop could be lowered to 1,313.

Concluding we remain bearish with lowered stops and we could add to short positions if support at 1,260 is broken. Long-term trend remains bearish and so do we. We target at a new low towards 1,150 at least.