Related Topics
Metals , Investing

Why Gold May Be Approaching a Critical Juncture

This classic Elliott wave pattern often ends with a burst

by Bob Stokes
Updated: January 05, 2023

Elliott Wave International's analysts study Elliott wave price patterns to help ascertain what is likely next for major financial markets.

Part of that Elliott wave analysis involves setting price targets which align with Elliott's rules and guidelines.

So, let's briefly touch on a classic Elliott wave price pattern and reference a price target regarding gold.

First, realize that there are quite a few gold bulls out there right now. Here are a couple of headlines:

  • 3 Charts That Show It's Time to Buy Gold (Barron's, Dec. 8)
  • 'Attractive risk-reward': Gold to rally by a double-digit percentage in 2023, UBS says (CNBC, Nov. 7)

Yes, gold has been in an uptrend since its early November low of $1616.47; however, our analysis suggests that the precious metal may be approaching a critical juncture.

You see, a classic Elliott wave formation known as an ending diagonal may be taking shape in gold's chart pattern.

As our Dec. 30 U.S. Short Term Update reminded subscribers:

Ending diagonals terminate the pattern at larger degrees, forming as fifth waves when the prior trend has come "too far, too fast..." The fifth wave often ends with a burst above the top boundary line of the diagonal, which is swiftly reversed. (emphasis added]

I'd love to show you the exact developmental stage of this ending diagonal but that's reserved for subscribers. But, if indeed an ending diagonal is playing out, when it concludes, what follows will likely take many precious metals' observers by surprise.

Do know that our U.S. Short Term Update mentions a price target that -- if reached -- will satisfy the minimum expectations for the ending diagonal to be complete. As mentioned, the price action may go beyond that in a burst before reversing.

Keep in mind that Elliott wave analysis offers no guarantees, but at the same time, also know that just two trading days after gold hit that Nov. 3 low of $1616.47, our Nov. 7 U.S. Short Term Update said:

[Gold]'s strong rise from $1616.47, the "test" of the lows of September 28 and October 21, appears to be an [Elliott wave] impulse, which may portend still-higher prices. [emphasis added]

As you probably know, gold has indeed rallied since then. You can get the important details of our current near-term forecast for gold -- as well as silver -- by following the link below.

Prepare Now for Potentially Swift Financial Changes in 2023

Financial trend changes appear imminent in key U.S. financial markets.

Their Elliott wave chart patterns speak loudly and clearly.

Get insights into each U.S. market which appears to be on the verge of a significant trend change, plus, learn why the widespread calls for a recession may be too optimistic!

Prepare now by getting our analysis of U.S. stocks, bonds, gold, silver, the U.S. dollar, the U.S. economy and more with the Financial Forecast Service.

Elliott Wave International’s Financial Forecast Service

All month long, FFS shows you the patterns in U.S. stock indexes, bonds, gold, silver, the U.S. dollar, as well as market psychology and cultural trends. We show you where the trend is now, and when prices should turn -- specifically, we show the pattern at multiple degrees of trend, with precise risk/reward calculations. If you have fewer surprises, you can be better prepared.

Here’s how it works:



Subscribe now and read the current issues.



Fine-tune your portfolio plan.



Relax. Watch the markets with your targets in mind.

Your Financial Forecast Service Team Helps Put YOU in Control of the Market’s Trends and Turns

Your Financial Forecast Service guides -- three of the best-known market analysts in the world:

  1. 1. Robert Prechter, Author of 16 market-related books, New York Times Best-Selling Author and Editor of Elliott Wave Theorist
  2. 2. Steven Hochberg, Editor of the Short Term Update and Co-editor of The Elliott Wave Financial Forecast
  3. 3. Peter Kendall, Author of The Mania Chronicles and Co-editor of The Elliott Wave Financial Forecast

As featured in:

Here's what you get with the Financial Forecast Service

Every Month

At the end of each month, you get a 30-60 day look ahead at the markets. Elliott Wave Financial Forecast lays out expected trends and turns in stocks, gold, USD and bonds.

3x Per Week

At market close every Monday, Wednesday, and Friday, you get the Short Term Update, alerting you to what’s changed and what’s upcoming in the next several days.

Latest Research

Every month, Robert Prechter sends you his latest research about waves of social mood in the markets in the Elliott Wave Theorist, so you always know the full picture.

Start Your Subscription Now


for 1 month of unparalleled market insights

The Opportunity-Finding Power of Elliott Waves: So Nice, We Had to Show You Twice

See what our subscribers saw before the big rally in cocoa, when the opportunity window was open.

Explosive Rise in Stock Market Volatility! Why It May Be Ahead

Options which expire within 24 hours have increased in popularity. The lack of time premium makes them highly sensitive to price changes. Learn how this relates to the CBOE Volatility Index (Wall Street's fear gauge).

Why Have Society's Values Shifted Over the Past 25 Years?

When you look at society today, there's no dispute that social values have shifted. But why? Some say demographics. Others blame politics. Yet others say it's the influence of the news and social media. Let's take a look at an indicator that tells a different story about why our values differ starkly from a generation ago.