Gold prices have continued their upward extension towards 1,350 where wave C equals 1.618 times of wave A. The rise from 1,270 is near completion and we favor closing long positions, raising stops and remaining neutral. We believe that soon a downward correction will start. We will go short only if prices break support levels and break out of the upward sloping trend channel.

The bigger picture wave count is shown in the chart above. The upper boundaries of the longer term upward sloping channel are important resistance levels and I expect prices to be rejected there and pull back down towards the previous wave 4 or the lower boundaries of the upward channel. Breaking out of this upward sloping channel will confirm our view that this upward move from 1,180 is corrective. If prices manage to remain within the channel, then we will look into the possibility of the existence of a 5 wave upward move from 1,180 that could imply longer term bullishness.

The short-term trend in Gold prices remains up. The move from 1,270 seems complete and I expect the short-term upward channel to break soon. If that happens I prefer short positions with the last high at 1,348 as stop. I expect at least a 30 dollar decline and a visit to the 4th wave price area. Although my primary scenario is bearish and I believe that the entire upward move is corrective, we should not ignore the possibility that a larger upward pattern is in force. If prices break downwards but do not manage to overlap wave 1 at 1266, then the bulls will still have many posibilities of survical.

Concluding, we are currently neutral expecting a break of the upward channel to go short with the last high as stop and first take profit level at the 1,310 area.