05.09.201312:32 Forex Analysis & Reviews: Gold Elliott wave analysis for September 5, 2013

Gold prices fell sharply yesterday as expected after topping 1,415. Support at 1,400 failed and prices fell sharply below the recent low at 1,384 confirming that trend is down. Now trading at 1,388, we expect downward pressures to continue towards 1,360.

The short-term resistance is found at 1,395. If this resistance is broken upwards we could see a move towards 1,405. Important resistance is the recent high at 1,415. We do not think prices will manage to break that level. We expect prices to continue their pattern of making lower lows and lower highs. Next important support is 1,372.

If the 1,372 support is not broken and if there is no higher high above 1,415, then we could very well be inside a sideways triagnle. It is too early to confirm this scenario but until then we will remain bearish with 1,415 as stop. Our first target still remains at 1,350-60 area specially if 1,372 is broken. The longer term trend however remains bullish as no upward channel has been broken and all our automatic indicators still are green. This downward move could very well just be a small correction. In the next few sessions things will get clearer.