I don't know where gold locus gets the labelling though. The decline that terminated into the May 10th low was a clear 9 wave "C". Hopefully it is just a misprint.
The XAU 106 target is also a 78.6% retrace of the '04 leg down. Bears might argue that this sets up a nice Gartley pattern and failure here would mean a "C" wave down to new lows. I don't see this as a true Gartley pattern because the wave pattern is not correct (leg A should have retraced 62% of the leg down which it didn't and a good retracement should have followed). So I don't think this applies. Regardless, a break to XAU 110 would slam the door on the bear case.
Gold has made a $25 run from Sept. 8th at $395. Remember that we are above the 62% fib retracement (~$409) of the '04 leg down. So this is not a bearish position for the POG. We may give that level up in the near term though.
I also like to look at the Euro for any support for the POG. A pullback after the G7 (8,9 whatever) meeting was not a big surprise, but now what? I don't see a big breakdown for the currency from here. And I have given up trying to figure out the count on the USD index.
I'll be looking to reenter a bunch of gold longs (+margin) possibly later this week. The POG will have to cooperate here as well though. The objective being to catch the move to XAU 106. Then we'll see where we are from there. Seasonals weaken soon and may cut this short.
cheers,
john
