Gold has reacted to world events, the question is which ones are more important to justify investors to seek safe haven in gold. Was it the Shanghai, or was it threat of war between Saudi Arabia and Iran or the threat of 6 more interest rate hikes and the domestic stock crash this morning. Oil also took a bit hit, but has started to recover. If it was all just part of a correction, then gold and even oil will push higher. Since December 2015 we have had several higher lows and this is the sign of a conventional bull market about to start out.
From my Elliott Wave perspective, it means shit, as the same thing does happen in any 4th wave rally, besides the majority use this higher high indicator as well. For this pattern to start filling out another leg up, then gold has to perform and show us some better impulse moves. Gold has bottomed with a small spike which looks promising, but it is still in a corrective pattern at this time.
The gold, oil ratio was close to 28.5:1 which is extreme by any standard of measure. About $1046 is the last record low for gold, which puts gold only $29 above its last bear market record low. This is not good enough for a full month of performance.
It will be a big test as we need gold to take out all the highs for the December month as these patterns all look
Sure gold woke up this morning with a bang, but now we have to see if the trend which already started in December 2015 will continue.