Elliott wave analysis of Gold for March 3, 2021

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Gold has been correcting in wave 4 since the peak at 2,075 is early August 2020. As wave 2 was a large flat correction we should expect either a zig-zag correction or a triangle consolidation in wave 4. We can now conclude, that wave 4 has turned into a series of zig-zags. We have counted them as a double zig-zag (W-X-Y), but it's actually possible to count a triple zig-zag (W-X-Y-X-Z) in the later case this will conclude the series as a triple combination is the larges sequence you can have. If, however its only a double zig-zag we could see one more decline in wave 4. This is however not our preferred view and we will be looking for a break above minor resistance at 1,760 and more importantly a break above resistance at 1,816 as confirmation that wave 4 has completed and wave 5 now is in motion.

Also adding confidence that wave 4 has completed is the fact, that wave 4 can corrected 38.2% of wave 3.

Wave 5 should move clearly above the peak of wave 3 at 2,075. It is worth to remember that fifth wave rallies for commodities often becomes extended, which in this case will call for a rally to at least 2,729 but it may extend even more than that, so be ready for a violent rise in wave 5.

Trading recommendation:

Buy a break above minor resistance at 1,760 and place your stop at 1,705.

The material has been provided by InstaForex Company - www.instaforex.com

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