Alf Field: Gold Correction Is Over

There is a strong probability that the correction in the price of gold has been completed. This article has four separate sections. They are:

1. The Elliott Wave (EW) justification for thinking that the correction in gold is over.
2. Why corrections happen in gold from a fundamental viewpoint.
3. The extent to which manipulation affects the gold price.
4. A possible “black swan” event that could trigger a gold price surge.

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The bottom line is that we now have a really strong probability that the correction which started at $1913 on 23 August 2011 has been completed both in terms of Elliott waves and also in terms of time elapsed. If this is correct, the gold price should soon be expressing itself in violent upside action as it moves into the third of third wave which is still targeted to reach $4500.

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There is a high probability that the correction in the gold price that started in early October at $1797 has been completed.

All the minor waves are in place and the A and C wave portions are approximately equal at -$120 each. ...
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Note that $1642 was also the 61.8% retracement level as well as the point where waves A and C would have been equal. That target of $1642 was not achieved, the lowest PM fix being $1650 on Dec 20, 2012. There was a slightly lower morning fix the next day, but there is enough evidence when combined with the Comex gold chart to conclude that the correction from $1797 has been completed.

Obviously a decline to below $1636 would render this analysis valueless and we would have to reconsider the situation. The PM fix on Jan 2, 2013 was $1693, so there is already some upward movement on the scale that one should now expect.

Once $1800 is taken out on the upside, the gold chart will look tremendous. A beautiful “cup and handle” base would then provide strong support for a vigorous upward climb in the precious metal. At this stage there is no reason to abandon the rough target of $4500 for this coming upward wave. Once we have the next upleg above $1800 in place, it will be possible to start refining this target.

It seems that gold is well set up for a spectacular year in 2013.
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PMBug said:

It's deja vu all over again.



http://www.jsmineset.com/2013/01/02/gold-analysis-2013/

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DSAbug said:

We might be at 28 today if the unemployment rate comes out around 7.6% Ofcourse that is a joke number no matter what but momentum is clearly still down.

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Late Friday afternoon in New York (April 12, 2013) gold plunged through the critical support level around $1525 level that has held resolutely since the start of this 19 month correction from $1900 in September 2011. In the process of this sudden drop, confidence in gold by long term investors has been badly shaken.

The sad thing is that this late afternoon selloff was an orchestrated event by people wishing to see the gold price lower so that they could cover short positions in the paper gold markets. Proof of this is that London PM fixing on Friday was $1535. Once the London physical market closed, the orchestrated selling in the paper markets gathered momentum. By the close of the Comex paper gold market, gold had dropped $60 in just the last couple of hours on very high volume.

This is not something new. Observers of the gold market have been aware of many other occasions where similar events on a smaller scale have taken place on Friday afternoons. There is little point getting one’s knickers in a knot about this because every short sale in the paper market has to be covered by a corresponding purchase in due course. Thus if people who bought into the selling spree simply hold onto their positions, a short squeeze will eventually develop as the short sellers try to cover their positions, causing the gold price to rise.

Often the physical markets come to the rescue as the lower prices generated by the Friday selloff sparks increased buying in the physical markets, helping to spur the recovery. The result is that the price of gold recovers fairly quickly after a Friday afternoon selloff. The coming week will show whether this happens again this time.

In January this year I published an article indicating that there seemed to be a reasonable chance that the long gold correction was over. That article indicated that if gold dropped below $1636, that the analysis was incorrect and that something else was happening. Gold did drop below $1636 and has continued to decline, proving that the January analysis was faulty.

At that time last January I had assumed that the rise from $1540 to $1790 in 2012 was the first upleg of the new bull market and that the correction to $1636 was the first minor correction of the new bull market. These were incorrect assumptions. The big correction from $1900 in September 2011 was still under way. The low had still to be reached.

In my Keynote speech to the Sydney Gold Symposium in 2011 I had a target of $1480 for the low of the expected correction. Despite several plunges into the low $1500’s, the price never achieved that $1480 target. The low price for Comex was $1523 and the lowest PM fixing was $1531 in late December 2011.

It bothered me from time to time that gold had not achieved my target. Now the late Friday selloff last week has driven the gold price to a closing level of $1477, finally reaching the target of $1480 set 19 months ago. What remains to be seen is whether this target holds and that the bull market resumes. The coming weeks should indicate what is happening.

What we need to look for is a swift recovery to above $1500 and an ongoing strong up-move in a truly impulsive manner. The fundamentals for holding gold are as strong as ever. ...

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