In our previous article about the precious metal readers saw how the Elliott Wave principle put us ahead of gold's $72-decline from $1531 to $1459. In short, the hourly chart made us think a three-wave decline from $1555 was still in progress. Hence, the bears remained in charge and more weakness could be expected.
What we didn’t mention was that our subscribers actually received a little more information with their September 25th updates. Namely, that once the support near $1460 was reached, a bullish reversal should be anticipated. The full chart this conclusion was based on was sent to clients more than two weeks ago. Take a look at it below.
Our October 1st article already explained the Elliott Wave logic behind the bearish idea. We thought a w)-x)-y) corrective combination was going to form once wave y) completed the pattern near $1460. On the other hand, once a correction is over the larger trend resumes.
Gold Absorbs the News and Follows the Pattern
Gold ‘s daily and 4-hour charts, also included in our premium analyses, revealed that the yellow metal was in an uptrend prior to entering the above-shown correction. So, it made sense for this uptrend to resume as soon as wave y) ended. According to this count, a bullish reversal near $1460 had to be expected.
Wave y) ended at $1459 on October 1st. On October 3rd, gold exceeded $1519 for a 4.1% surge in just two trading days. The U-turn the support near $1460 caused was very sharp and fast. Fortunately, with the help of proper Elliott Wave analysis it was also quite predictable.
Furthermore, traders didn’t need to pay any attention to all the Brexit-, trade war– and Middle East-related news the media keeps bombarding us with every single minute. A chart and an eye for Elliott Wave patterns proved to be enough to stay ahead of gold ‘s recovery.