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Oct 21 2010
Gold moved lower this week, right into the base channel zone where the recent price action found a support. We still like the idea that a decline from the top is correction, labelled as a black wave 4 on the updated count. You will notice that prices also retraced 38.2% of a wave 3 distance into the previous fourth wave area, where usually fourth waves find a base, before trend reverse into a wave five. In our case that would be on the upside, above 1387, while the market trades above 1254 critical wave 1 region.
Gold 4h chart:
Disclosure: no pos