Short term Gold (XAUUSD) Elliott Wave view suggests that rally from 7/10 low is unfolding as a a double three Elliott wave structure. Up from 7/10 low (1204.69), Minor wave W ended at 1274.11 and pullback to 1251.27 ended Minor wave X. Wave Y is currently in progress as a zigzag Elliott wave structure where Minute wave ((a)) is expected to complete with one more leg higher and can reach as high as 1294.3 – 1304.6, then it should pullback in Minute wave ((b)) before the rally resumes, We don’t like selling Gold and expect buyers to appear again after Minute wave ((b)) pullback is complete in 3, 7, or 11 swing, provided pivot at 1251.27 low remains intact.
Gold Hourly Chart
According to Elliott wave theory, Zigzag is a 3 waves structure having an internal subdivision of (5-3-5) swing sequence. The internal swing is labeled as A, B, C where A = 5 waves, B = 3 waves and C = 5 waves. This means that A and C can be impulsive or diagonal. The A and C waves must meet all the conditions of 5 waves structure, such as: having an RSI divergence, ideal Fibonacci extensions, ideal retracements etc. For illustration purpose, in a bearish zigzag graphic below, we can see what Elliott Wave Zig Zag structure looks like. 5 waves down in A, 3 wave bounce in B and another 5 waves down in C.
Zigzag 3 Wave Structure