Back in November 2016, we mentioned that Gold should find buyers in 1540 – 1487 area and bounce ideally to resume the rally for new highs or in 3 waves at least. Three weeks later, XAUAUD reached the mentioned area, it then found a low at 1525 on 12/15/2016 and started rallying. The yellow metal has reached 61.8 Fibonacci retracement (1728) of the drop from June 2016 peak and longs from 1540 should be risk-free already. Today, we will take a look at the price action from 12/15/2016 low and the current forecast.

XAUAUD Weekly Elliott Wave View

The Bigger picture in Gold-AUD remains unchanged. It’s showing 5 swings up from 2008 low which means the sequence is incomplete and calls for higher extension towards 2220 – 2441 area. The pullback in wave “x” reached 50% of wave “w” and it was completed at 1525. As dips hold above this level, rally is expected to continue towards 2220 – 2241 area. If pivot at 1525 low gives up during the current pullback, wave “x” could turn into a double three correction towards 1417 area but it should still remain bullish against 1280.52 low. This alternate view is less likely.

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XAUAUD Elliott Wave Diagonal in wave (A)

The yellow metal has ended the cycle from 12/15/2016 (1525) low at 1727.59. The move-up from 1525 low could be viewed as an Elliott Wave Diagonal structure, i.e wave (A). A pullback in wave (B) should unfold in 3, 7 or 11 swings and hold above 1525 low for extension higher. 1626 – 1602 is 50 – 61.8 Fibonacci retracement area of wave (A) and could complete all of wave (B) or ideally complete just wave W of (B) which would be followed by a bounce in wave X and another push lower to complete wave (B). GCC (Wisdom Tree Commodity Index Fund) Elliott wave structure and sequences supports the idea of a double three correction in wave (B). 

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XAUAUD FLAT in wave (X)

If the cycle from 6/6/2017 (1727.59) extends, then we could consider cycle from 12/15/2016 low to be over at 4/18/2017 (1712.75) i.e. wave (W) followed by a FLAT in wave (X) which should still end between 1618 – 1568 area and then we can see the yellow metal resuming the rally or making a larger 3 waves bounce at least.

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