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Elliott Wave Analysis: Silver and Gold in the Neutral Zone

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It's hard to say what the next big move in the metals will look like. Here's why.

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Last weekend, I noted that I really would not like to see the metals below the 121 support level in the SPDR Gold Shares (NYSEARCA:GLD). But, I have also been noting for some time that silver has not presented us with the same bullish pattern we have been seeing in GLD.

During the week, I sent out an alert that noted that if GLD were to drop into the blue box on my 144-minute chart, it would cause me to become neutral on the immediate direction of the metals. So, as long as we maintain over the 117/118 region in GLD, we still can see, based on Elliott Wave analysis, a resurrection of a bullish pattern as a leading diagonal for purple wave i, with this pullback being a wave ii.

So, in truth, what I'm saying is that, unfortunately, I am unable to provide you with any "edge" this coming week as to the next larger move in the metals since the pattern rise from the last lows looks equally well as a 4th wave and a leading diagonal. It leaves us with the perspective that the upside no longer has a clearly bullish pattern associated with it, and the downside has no clearly bearish pattern associated with it either.

So, let's focus on the larger perspective at this time. As I have said for quite some time now, I am still expecting that GLD will target the 100-105 region (with the potential to spike as low as the 90 region) before we see any true potential for a long-term low being struck. The only question we have been trying to answer is whether or not we'll see a move to the 136-140 region in GLD and the 26-27 region in the Mini Silver Futures Contract (NYSEL:YI) before we go down for the final wave to complete an almost 3-year correction.

See charts illustrating wave counts on silver and gold here.

Editor's note: Avi Gilburt is author of ElliottWaveTrader.net, a live trading room and member forum focusing on Elliott Wave market analysis. Avi emphasizes a comprehensive reading of charts and wave counts that is free of personal bias or predisposition. His Elliott Wave analysis appears frequently on several financial news sites.

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