Dear readers: Don't assume that all Elliott Wave analysts are bearish on gold. Far from it! I was intrigued this evening to see that Tony Caldaro published a more detailed review of his bullish long-wave count for gold, in a post titled "
all that glitters" at his Objective Elliott Wave site, at
http://caldaroew.spaces.live.com/blog/cns!D2CB8C5EBA2ADE86!60062.entry. Below, I've included my own weekly and monthly charts of gold. The weekly chart shows gold has remained within uptrend channels, and the monthly chart does look very much like the well-known bullish "cup and handle" breakout pattern. But you'll want to check out Tony's work with his discussion of the even bigger and longer-term wave count for this precious metal. The bullish view may also have something to do with the virtually inevitable weaknesses of currencies, as policymakers cannot resist the urge to devalue the dollar or other currencies in order to achieve other objectives. Even though there are also times when currencies and gold can move together, at least temporarily. For that matter, equities don't always move in the same direction as gold.
Currently, we are looking for a probable rally top in equities to finish playing out soon as our primary scenario. And we are expecting a pullback in gold - but that doesn't mean we see exactly the same path for equities and gold (or even for gold priced in dollars versus priced in euros or other currencies). On a gold pullback, it's obvious there's great price support in the $1000 to $1034 range; and if necessary, lower at $950 to $960. If necessary, we can also look again at Fibonacci retraces and my uptrend channel lines on a pullback. There are some good reasons to think that a pullback later this year or into early 2010 may be an even better buying opportunity.
So even if you're not an Elliott Wave type, you'll want to take a look at Tony's views on the big picture in gold. Because you sure won't want to be on the wrong side of this trade.
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