Gold as a double zigzag before a contracting B-wave triangle

The 380-400 continuation view was abandoned

A previously constructive gold view that looked for a continuation toward the 380-400 area was abandoned after the metal's position was reassessed with Elliott wave analysis. Elliott wave analysis is a labeling method that reads an OHLC swing sequence as motive and corrective phases so a count can be confirmed or abandoned when later swings fail the expected form.

The longer-term count is a double zigzag

On a longer-term scale, gold is read as a double zigzag: a three-wave decline, a three-wave intervening advance, and a final three-wave decline. A double zigzag is a larger corrective template made of one three-swing decline, an intervening three-swing rally often marked X, and a second three-swing decline.

The first three-wave sequence is marked A at 610, B at 730, and C at 460 and is dated as complete in 1980. The following X-wave sequence is marked a at 690, b at 600, and c at 730 and is dated as complete in September 1980. The X-wave is the connecting three-swing advance that sits between the two zigzags of a double-zigzag correction.

The A wave of the last three-wave decline is placed in March of the writing year, and the rally that followed is classified as a B-wave triangle. A B-wave triangle is a triangle used as the middle swing of a larger three-wave correction, implying that the next decisive move should resume the direction of the preceding A wave.

Finish the triangle only after 0.618 legs appear

A triangle pattern is a contracting sideways structure of overlapping swings that is treated as complete only when later legs shorten in a measurable way. Fibonacci retracement is a ratio test, commonly 0.618, applied to the length of a prior swing to forecast or check the size of the next triangle or zigzag leg.

On December gold futures, the first triangle advance from 301 to 356 is given as about 55 points, and the next decline to point B as about 41 points. In a contracting-triangle reading, the next advance is projected as 0.618 of the first 55-point rise, or 34 points, and that advance is described as measuring 34 points from 315 to 350. The following decline is required to stand in a 0.618 relationship to the prior down-leg, or about 25 points, and that length is described as already reached at point D.

If those ratio checks hold, the last triangle advance is estimated near 21 points, with a possible termination near 346 and an initial downside objective of 246 after the triangle ends.

Keep the post-triangle target on a checklist

Editorial: treat the triangle as finished, and keep the 246 objective on the checklist, only after the successive 0.618 legs appear. The post-triangle thrust remains a hypothesis rather than a story.