Accordance with the Elliott Wave Principle :

“A zigzag, on occasion, will cut deeply and move into the area of the second wave of lesser degree, although this almost exclusively occurs when the zigzag is itself a second wave. Double bottoms are sometimes formed in this manner.”

Based on the description, the rise of low on 1132 through high in 1309, could be second wave of wave (5) likely in progress, and so third-wave decline ahead.

Explanation of the possible wave 2 :

The beautiful leading diagonal wave a(circled), conceptually could suggest an extended impulsive-formation as the wave c(circled), in order to approach to an asymmetrical form on the overall corrective sequence as wave 2 .

Currently, how in direction can Gold be expected to go?

Under the bearish view, the completed leading expanding diagonal, which may be an initial-subsequent of decline ahead, conceptually would infer that gold has probably completed the corrective wave 2 at the terminus point of 1309, while it raise confidence on the possible turning of the trend to bearishness.

A bullish alternate count :

Under a bullish alternate view on the daily chart, Gold may be completed a five-waves sequence as the wave (5), and hence the low of 1132.8 could be the terminus point of the wave (5) of  A(circled). Base on the view, the rise of bottom at the 1132.8 level, could simply be primary waves of the first sequence on correction of the wave A(circled).

Gold - Daily


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