Gold made a break out earlier today during the trading hours of the Asia session. As we had mentioned several times before in our previous posts, Gold was expected to make an upward break towards $1,320-40 to finish the corrective wave C that started at $1,208. The sideways pattern that was formed, gave us clear barriers of $1,273-1,291 that if broken prices would accelerate. Gold started its break out from Friday as it moved above $1,291 giving us a bullish signal.
Prices broke out of the wave 4 triangle as shown above and reached our first target of $1,322. $1,340 is a Fibonacci extension target that is very possible to be achieved but not necessary for the wave pattern to be complete. We can now say that the upward move from $1,208 is over and we will wait for any extension to complete. Breaking below $1,270 will confirm this upward move from $1,208 is over. We now turn to neutral in Gold as we think there is not much more upward potential here.
Prices are finally reaching the upper boundaries of the channel and we think its time for a top around $1,320-40 area. Next move expected is down to confirm the top. This will happen if prices break below $1,270. First worrying signal for bulls will come when prices fall below $1,300. Concluding, we were bullish in Gold from $1,215 and we had $1,340$ as a target. Now that prices have reached $1,322 we believe it is time to turn at least neutral waiting for a sell singal.
The material has been provided by InstaForex Company - www.instaforex.com
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