In recent weeks, the stock market has displayed a bullish trend, with several indexes finally breaking higher.
This surge is fueled by speculations that the Federal Reserve (FED) is considering a pause in its hiking cycle. Adding to the positive sentiment, the US Consumer Price Index (CPI) came in lower than expected, decreasing from 4.7% to 4%, increasing the likelihood of a FED hold in the near future. At the same time, metals are coming down, which is normal as the demand for gold drops as inflation comes lower.
But looking at the technicals, we see gold still bullish on higher time frame charts where we expect more upside after a retest of all-time highs, but ideally, this will occur after the current complex correction is completed. Notice that recovery on the 4h time frame from 1970 into new 2070 highs was made by three waves, so in Elliott wave terms, this was wave B as part of a higher degree A-B-C expanded flat correction. In flats, wave C should be made by five waves, so before we might see stabilization on metals, be aware of the drop towards 1930 - 1900 support area after five waves down are completed. Now, this is still a subwave (4) triangle that can be coming to an end. So in the short-term fifth wave can cause a final drop before the market stabilizes. Why can it stabilize then? Because the triangle occurs prior to the final leg within a higher-degree pattern.
Be careful today with gold during the FOMC rate decision. Fed Chair Jerome Powell will be appearing at a news conference today (Wed, June 14th) at 2:30 PM (ET), after the FOMC meeting.
Grega
www.wavetraders.com