06.11.201314:55 Forex Analysis & Reviews: Gold Elliott wave analysis for November 6, 2013

Today we focus on the two most probable wave scenarios in Gold. The first scenario implies that we have seen the end of the downward correction at 1,180 and prices are stating a new upward impulsive wave.

The second wave scenario implies that the downward correction is not over yet and we might see another downward push in prices towards the 50% retracement at 1,080.

In order to indentify which scenario has the most chances of success, we will need to watch closely which price levels are broken. The potential head-and-shoulders pattern being formed near the 1,360-1,300-1,250 area supporting the second bearish scenario. Breaking below 1,250-70 will increase the chances dramatically for the second bearish scenario. The head-and-shoulders target if prices break below 1,250 will be 1,140 at least. So it is very possible to see a new lower low. If prices however break above 1,360, then the bullish scenario will be the most possible one, as by breaking above 1,360 the head-and-shoulders pattern will have much less chances of success.

In the short term, we have resistance at 1,321 that if broken could push prices towards 1,337. If resistance holds, we expect 1,290-1,300 at least to be reached.