Recent analysis of the Gold (XAU/USD) market, utilizing Elliott Wave theory, has revealed intriguing insights into its current behavior and structure. The focus is on the ongoing sideways movement that has characterized the market and the bullish expectations that may follow.
The analysis identifies a distinct five-wave structure, labeled as 1-2-3-4-5. Within this framework, the second wave, referred to as wave 2-circle, is described as a flat structure. Currently, the market is in the process of unfolding wave 4-circle. This particular wave has shown notable retracement characteristics, surpassing the typical 38.2% retracement level and touching the more extreme 50%-60% range, which raises questions regarding the standard behavior typically expected from a wave four.
Given this extended retracement, it is anticipated that the market will undergo a significant period of sideways consolidation before any resumption of upward movement can be expected. The nature of this consolidation may manifest as a triangle or flat structure, indicating that price stabilization is likely in the near term.
Looking ahead, the analysis projects a bullish movement in gold prices, with expectations of activity intensifying towards late February or early March. Stakeholders and traders are advised to keep a close watch on the internal structure of wave four, as it may provide critical indications regarding the next directional move, whether towards continued consolidation or the eventual upward trajectory.
