Gold can pull back to $1,200 before it sees $1,400

Break out or fake out….
July 12, 2016
Triple top at 96.70 for the Dollar index
July 18, 2016

First of all I would like to clear out that I’m a Gold bull believing that Gold has made an important long-term low at $1,045 and that the next bull market for Gold has started. Now that this is out of the picture I would like to point out the possibility of a deep pull back towards $1,200 or even a bit lower near $1,170. In the chart below I point out the wave count I see in Gold and what naturally follows is a three wave correction that should at least reach 38% Fibonacci retracement. However the most probable Fibo level to be reached is the 61.8% level.


With blue lines you can see also a possible megaphone pattern. The weekly rejection at the upper boundary of the megaphone pattern is an initial bearish reversal signal that should not be taken lightly. Short-term support at $1,350 is broken so we look for the next one near $1,335 (NFP Lows) and then towards $1,285. At $1.250 we find the 38% Fibonacci retracement and if this scenario plays out, this level will surely be seen.

So a possible scenario that could become my preferred wave count implies that a pull back has started in Gold and we should wait patiently to buy Gold for the next leg up above $1,400 most possibly towards $1,600.

Thank you for taking the time to catch up on my thinking.


Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.