Gold Action
Where to
from here?
Dr Clive
Roffey
Excerpt from No 384
13 December, 2004
I attach a short picture of my continued Elliott wave analysis
of the $ gold price.
I have long
detailed my Elliott Wave analysis that bullion was in an extended
wave that would have nine subdivisions. I disagreed entirely
with the community that labeled the A-B wave as the 1-2, the
first corrective wave. It was still part of the major base and
not the start of the main bull market. That is why those analysts
were constantly calling for a fall in bullion back to at least
$360, and much more in some cases. Bullion did not pull back
to $360 because it was only mapping out a minor 5-6 correction
not the major correction expected by most analysts.
Where to from
here?
The 5-6 correction
has completed and we are on our way up to 7 prior to the corrective
wave 8 followed by the final bull wave to 9 for major new highs
in this long term bull market.
I have detailed below my analysis of the current situation.
Bullion broke
decisively above the 15 year resistance at $430. During the past
week it has pulled back to test this breakout. This has provided
a minor iii-iv correction and another buying level with further
upside counts. I am looking for a move to $495 as the next phase
to be followed by a minor 3-4 correction prior to completing
wave 6 at around the $530 level for point 7.
At this point a reasonable correction from 7 to 8 can be anticipated
that could last for four or five months. After this correction
comes the final upside euphoria surge that should take bullion
back to around $630. In my analysis, this will be the time to
panic. A move above $600 will signal the end of the major bull
run from 2001. It will be selling time.
Until then
sit back and relax. Sure we will see some of the usual volatility
associated with all precious metals. But I do not see any long
term danger until bullion is well over $600.
Imagine what
a gold price of this level will do to Durban Deep!
10 December,
2004
Dr. Clive Roffey
Johannesburg
South Africa
email: info@utm.co.za
"Gold
Action" is a fortnightly commentary on global gold and precious
metal markets produced by Dr. Clive Roffey, Johannesburg, South
Africa, a leading professional independent commentator on gold
markets since 1969.
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