Gold: Boldly Going Where It Has Not Gone In a While?

Home > Gold and Silver
Gold: Boldly Going Where It Has Not Gone In a While?
EWI's Metals Specialty Service shows you the near-term trend underway in the world's most watched precious metal

By Nico Isaac
Wed, 09 Nov 2011 12:45:00 ET

Get investable insights sent to your inbox at least once a week – for free. Challenge the way you think about investing with The EWI Independent.

Privacy

According to fundamental analysis of financial markets, external news events -- such as newly released economic data or newly formed weather patterns -- create market trends.

In reality, however, the sequence of events is often WAY out of order. First, a market's price makes a significant move in one direction. And only then do the experts ADJUST the news to FIT said move AFTER the fact.

Case in point: In the early 8am-to-9am hour on November 9, gold prices enjoyed a strong uptrend. During that time, the following "bullish" news items were said to be responsible:

"Gold Surges On Eurozone Woes" (The Guardian)
and --- "Gold Bullion Benefiting From Safe Haven Flights As European Debt Crisis Intensified" (AP)

Then, around 9am to 10 am, gold prices turned down in a precipitous $20-plus per ounce decline. "Fundamental" analysts didn't miss a beat. With just a few minor tweaks in the wording, their formerly "bullish" gold stories were now "bearish." See:

"Gold Prices Slip On Worsening Eurozone Debt Crisis." (International Business Times)

So, is gold going up or down because of Italy's implosion? Based on the above logic, I wouldn't know what to think, either.

In comparison, the advantages of Elliott wave analysis are obvious:

Elliott waves anticipate a market's next big move before it happens -- instead of "explaining" it to you afterwards.
Elliott offers you OBJECTIVE forecasts based on clearly defined wave structures -- not the confusing news interpretations
Each one of the 13 Elliott wave patterns adheres to specific rules that show you the direction of the trend and specific price targets.
Elliott also tells you how long the trend should last, when the trend may end, and most importantly, at what price point the forecast becomes invalidated.

With that in mind, we now turn to EWI's Metals Specialty Service to see exactly how editor Mike Drakulich is utilizing his Elliott expertise to stay ahead of gold's near-, and long-term course.

On November 9, Metals Specialty Service's intraday analysis on gold unveiled a compelling price chart: It showed a double zigzag Elliott wave pattern underway since late September. (A zigzag is a simple three-wave move labeled A-B-C. When zigzags occur twice in succession, they are connected by a wave "X," producing what is called a double zigzag.)

If Metals Specialty Service's current Elliott wave forecast is correct, the double zigzag puts gold at a significant crossroad: It can either extend higher, along with prices -- or, it can call it a day and initiate a new downtrend.

But, according to Mike's analysis, two key technical indicators -- i.e. the 50-day Moving Average and long-term upper channel line -- are bolstering only ONE side of the outlook.

Find out what it is now via EWI's Metals Specialty Service. Click here to begin >>>>>

GOLD: Turn Market Possibilities into Actionable Probabilities with Help from an Elliott Wave Expert

Metals Specialty Service Editor Mike Drakulich uses the Wave Principle and 30 years of market experience to help you replace the endless market possibilities with higher-confidence probabilities.

Subscribe today to get Mike's expert intraday and daily Elliott wave forecasts complete with key price levels, targets and valuable insights for gold, silver and other major metals.

Learn more about EWI's comprehensive Metals Specialty Service now >>

Tags: Elliott Wave trading, Gold, technical indicators

Get Your Free Email Newsletters

Simply pick what interests you and enter your email address:

Challenge the way you think about investing with The EWI Independent

Dig deeper into the world of Elliott wave trading via Trading the Waves

Get the week's can't-miss articles and free resources from The EWI Weekly Select

Get the latest from our sister organization, the Socionomics Institute


We respect your privacy.

Stay Ahead of the Trend in U.S. Stocks

EWI's Financial Forecast Service equips you to think, trade and invest independently from the crowd. Here's what you'll get, risk-free:

Short Term Update -- Intensive forecasts and analysis 3x/week for U.S. stocks, gold, silver, bonds and the U.S. dollar.
Financial Forecast -- In-depth,intermediate-term perspective on U.S. stocks, gold, silver, bonds and the U.S. dollar.
Theorist -- Bob Prechter's monthly big-picture insights.

Put the Financial Forecast Service on your screen in minutes, risk-free>>

Most Read

Highest Rated

Free 20-page eBook

How to Use the Wave Principle to Identify Actionable Opportunities in Gold & Silver

In December 2010, the conventional wisdom claimed the fundamentals were unanimously bullish -- and that gold & silver would continue higher. Yet in December, EWI's Metals Specialty Service identified a textbook Elliott wave pattern: a "contracting triangle." This 20-page eBook walks you step-by-step through this opportunity-identifying pattern, by using an in-depth, real-world trading example.
Download your free 20-page eBook.

Gold and Silver

CLOSE [ X ]

The Elliott Wave Principle is a detailed description of how financial markets behave. The description reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific Elliott wave patterns in price movements. Each pattern has implications regarding the position of the market within its overall progression, past, present and future. The purpose of Elliott Wave International’s market-oriented publications is to outline the progress of markets in terms of the Wave Principle and to educate interested parties in the successful application of the Wave Principle. While a course of conduct regarding investments can be formulated from such application of the Wave Principle, at no time will Elliott Wave International make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Investing carries risk of losses, and trading futures or options is especially risky because these instruments are highly leveraged, and traders can lose more than their initial margin funds. Information provided by Elliott Wave International is expressed in good faith, but it is not guaranteed. The market service that never makes mistakes does not exist. Long-term success trading or investing in the markets demands recognition of the fact that error and uncertainty are part of any effort to assess future probabilities. Please ask your broker or your advisor to explain all risks to you before making any trading and investing decisions.