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Roland Watson (The New Era Investor) submits: As we mentioned in our first gold update just prior to the downturn in gold prices, the completion of a big move from July was imminent in terms of Elliott Wave analysis. Targets for the correction were suggested based on Fibonacci numbers and are in need of a little adjustment since the top came in at $541 instead of $538 and the minimum suggested correction at a Fibonacci retracement of 0.382 ($492) actually hit $493 due to the slightly higher top.

Since this correction is barely a week old, we are not likely to see much in a daily chart regarding price movement. Therefore, we look at the intraday movement of gold prices to seek clues as to the metal’s near-term price movement. Thanks to the excellent chart work at www.netdania.com we can analyse such hourly movement since the 12th of December:

We have annotated our Elliott Wave count and the result is pessimistic in the short-term for gold. From the 12th to the 17th a very good-looking impulse wave unfolded for gold. You can see the 1-2-3-4-5 count as well as the further 1-2-3-4-5 subdivisions of each of those five waves. And as noted earlier, this intricate impulse wave somehow organised itself to terminate on almost the edge of the fibonacci 0.382 retracement level. Don’t ask me how Elliott waves and Fibonacci numbers organised this between themselves, but I suspect the final fifth wave into the 16th was “short-circuited

Source: The Gold Correction In Elliott Wave Analysis