Gold Elliott Wave: Trading Heavy

Current Elliott Wave Analysis

The Elliott Wave structure in Gold suggests an incomplete Flat correction unfolding from the April high. Flats follow a 3-3-5 internal wave structure and are labeled as wave ((a))-((b))-((c)).

We previously highlighted a larger corrective pattern unfolding in Consolidating in Wave 4 back on May 2. Turns out that decline may have been just the first wave of a larger structure.

The recent decline from mid-June appears to mark the beginning stages of wave ((c)). According to Elliott Wave guidelines, wave ((c)) in a Flat is a motive wave that subdivides into five smaller waves. Within wave ((c)), Gold now seems to be progressing through wave (iii).

Wave (iii) often targets a 1.618 Fibonacci extension of wave (i), which projects a potential downside target near $3,218. A deeper extension toward $3,120 is also consistent with the completion of the broader Flat correction that began in April.

However, if price rallies above the wave (ii) high at $3,393, then this bearish interpretation will be invalidated, and the wave count must be reassessed.

Alternate Count – Leading Diagonal

An alternative scenario considers the rally from May to June as a leading diagonal wave (i), followed by the current decline as wave (ii).

Under this structure, wave (ii) is expected to retrace between $3,244 and $3,189—levels derived from the 61.8% and 78.6% Fibonacci retracement of wave (i).

Bottom Line

Gold is likely in the early stages of a small-degree third wave lower within wave ((c)). If this count is correct, expect a decline toward $3,220, and potentially as deep as $3,120. However, a move above $3,393 would invalidate the bearish view.

In the alternate scenario, a pullback to $3,244–$3,189 remains probable as part of wave (ii). Both counts align on the expectation for near-term weakness, particularly into the $3,220–$3,244 zone.

Short-Term Bias: Bearish

Long-Term Bias: Bullish

Key Level for Bearish Short-Term Bias: $3,393

Initial Target: $3,220 – $3,244

Secondary Target: $3,189

Third Target: $3,120