Gold as expected and posted in previous analysis, has bottomed at 1,208 and wave B was completed. According to Elliott wave theory applied to Gold, prices were expected to start a new upward move towards a new high above 1,266. We believe that wave C has started and that is why we were bullish from 1,215.
Prices have started trading upwards in an impulsive pattern and have broken above reistance levels at 1,227-1,240 and is now testing the 1,260 level. Bulls should be cautious as we believe this upward move is corrective and could end soon. Preferred strategy for bullish positions is to raise stop at least to 1,238. Overlapping price action will be bearish at this point and that is why I will use stop for longs that price level.
The target for this upward bullish move is 1,294 if the wave C will be equal to the wave A. As long as our stop is not broken, we will wait for that price level to be reached in order to sell. Even if the longer-term trend is going to change, even if 1,180 is a longer term bottom, at 1,300-1,340 we expected to see a short-term top and a pullback towards 1,250. However, I prefer the scenario that this upward move is corrective and at 1,300-1,340 the trend will change to down again.
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