Gold closing in on 1097 "triangle target" - what's next?

Gold skyrocketed to another new high today, after having gotten support at the 1027 that Tony Caldaro had mentioned in a recent update of his at his the Elliott Wave Lives On site (link and feed always at the right side of the page here). And also having found support in the uptrend channel I've shown, including an update very recently at my UBTNB3 blog. A reader today asked, assuming it gets to the $1097 level - what's next? Great question so let's take a look!

One price objective I've had in mind for a long time based on the long-term charts is $1192. (based on a Fibonacci "bullish butterfly" in the monthly chart). When gold priced in dollars pushed above $1007, then $1033, it brought the $1192 price into view. And it's reasonable to feel bullish about it anyway, viewing the monthly chart as a large bullish "cup and handle" breakout. Then again - it's also possible for $1192 to notch the level of a "B" wave that sends gold down in a big "C" wave retesting the $681 level - at least theoretically. Honestly at this point, that idea isn't my favorite anymore. But if gold loses the $925 and then $850 levels, I'd get concerned.

But what about this triangle I've marked on my weekly chart, below? If it's valid, it points to $1097 - and notice there's some negative divergence now, something I don't expect if this is really a more bullish third wave move. The price target for a thrust from a triangle doesn't have to be the final most extreme price reached. But if this triangle I'm seeing is valid, it can be saying that $1097 would bring an interim top. In that case, I'll be on the lookout for a pullback to the triangle apex about $930-950. Clearly one signal would be not just a reversal pattern but also a trendline break.

The move up from $681 is now about 400 dollars, interestingly similar to the average price "block" increase as gold rose steeply from its lows of the 1990's. There's a pivot about $850 and I'm thinking the $880/890 area would also be important if price fell under that $930 apex.

The apparent triangle also has me thinking about the potential for another type of large fifth wave movement, the diagonal triangle - if the contracting triangle I marked could be the "b" wave within the first "abc" zigzag leg of such a diagonal pattern. But it's early yet, so we need more time to confirm the pattern.

Meanwhile, Tony Caldaro has his own wave count for gold. I've copied below his weekly charts for gold and for $GPX precious metals (thanks Tony! these are from pages 9 and 10 of his public charts from the charts link at his site). So if Tony's count is right, stay tuned to his updates for details, and keep an eye on how he counts out these waves. Since I've learned to respect Tony's counts, I don't want to push my alternative triangle-based ideas too hard. So - just be alert at $1097, maybe tighten stops. And the same thought, even more so, if $1192 comes afterward before a trendline break (if it just pops on up to $1192 after $1097).

Notice that even Tony's charts are counted in terms of looking for either a wave V or wave C completion - so whenever it arrives, that will be a significant top. But also notice that the correction to $681 was itself not a triangle. So unless this rise now is a "B" wave (the view I don't favor anymore), then the level it can reach may yet be much higher than $1097 or $1192 and I won't rule that out. It's quite possible that the most bearish risk fore gold in the foreseeable future would be a deeper wave 2 pullback that goes under $925/930 and under $850. Depending what style if trading you have, you might want to place stops at $1027, and/or $922.

I see the news about India's IMF buying gold and cannot say it's really bullish. The Elliott Wave or socionomists' point of view is that governments are purchasers during final waves up, so it doesn't necessarily help. Then there are all those TV ads! But then again, many ordinary people are selling scrap gold in record numbers. So, I'd rather follow the chart analysis.