Gold extended to the upside. Some follow through is likely before buying demand fades.
Precious metals made once again headlines during the past week. Gold and silver spiked to the upside and gold exceeded its 2011 all-time high. It all happened on the back of an extremely optimistic sentiment and positioning. Nonetheless, the upside potential is not exhausted yet. Both metals recorded strong momentum, which hints to more buying demand at this stage. Most likely, gold trades within the 3rd wave within a C-wave of minor degree. The upside trend is well intact and 2,000 likely to get targeted before wave 4 corrects the push. Subsequently, more upside drift is likely and wave relationships point towards almost 2,100 until primary wave B(circle) ends.
Nonetheless, the extreme sentiment and positioning combined with a double zigzag off the 2015 imply that gold is within a corrective Elliott wave pattern despite climbing to all-time highs. Investors are most likely correct about their intuition for buying the precious metal. However, they will probably have to stomach some steep mark to market losses until their bet eventually proves correct.
Gold is bullish from a swing trading perspective and bearish from a position trading perspective. The party is not over and attracts some more people to join.
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