Gold Is Close to Renewing the Move to the Upside

Gold could not break below 1375 and started falling. If you look at the chart you can clearly see that the waves to the upside are corrective, formed in threes and are relatively equal in length, which is normal. If we add the trendline that connects the two higher lows we can see that the price of Gold is very close to reaching said trendline for a third time.

I examined the chart and I think that the most probable scenario is for Gold to reach this diagonal trendline which will likely happen very soon and then to renew its movement to the upside, since the limit of the downwards trend channel that formed between 7th July 2013 and 13th December 2015 and which was broken to the upside on 7th February 2016 at the 1215 level has not been reached yet.

We know that in order set the limit of such a technical analysis figure we need to project the height of the downwards channel from the breakout level to the upside and in this case the limit is set around 1423 – 1424. In this case the hypothetical third wave to the upside would be almost as long as the previous two and it would reach the limit of said channel.

In the alternate scenario Gold will break below the trendline and it will continue falling towards 1275 or even towards 1230, but at this stage this scenario does not seem to me to be very probable.