Gold reached 1,343 resistance area yesterday and pulled back down towards 1,336. Prices are moving upwards in an impulsive pattern giving increased chances to the scenario that a new high above 1,349 will be seen. Trend remains up for the short term and resistance is found at 1,349 after 1,343. If resistance is broken our next target is 1,365-95. Short term support is found at 1,331, 1,320 and 1,314.

The blue upward sloping trend line if broken could push prices towards 1,310. This upward impulsive move could just be a part or the entire 5th wave from 1,180. Important support levels for bulls are the 1,250 and 1,280 price levels. If those two levels are broken, chances for a test of 1,180 will increase and also increase the probability of a new low.

The longer-term picture looks promising as the prices break above the longer-term downward sloping channel. Today, we post an alternative elliott wave count that if it holds then the bullish potential of Gold prices could reach 1,500 and above. The chart below shows the wave alternative count where it implies that the upward move from 1,180 to 1,349 was the entire wave I and the move to 1,270 was wave II. We then should now be in wave 1 of III.

So how do we trade Gold now. For now, we prefer to be neutral as entering long at this level is too risky. Stop for bulls could be the 1,331 for short term and 1,270 for longer term traders. The bearish stop is 1,350 or short positions could be opened once 1,331 support fails.