Monthly Log Scale Gold

Certain rules apply to any elliot wave analysis of a price chart. So if we are to arrive at some sort of price outlook going forward for bullion prices, the elliot wave analysis might provide some clues through taking in wave form analysis.

Now the linear scale nominal gold chart does not provide a good basis for departure, and good deflated gold charts are very hard to come by via the internet, so the best choice would then be the nominal log scale chart, as it deals with percentage gains, rather than plain arithmetic.

First, we go to a video explaining wave three extensions in elliot wave, and exactly what that means:

http://www.youtube.com/watch?v=gONcBRtZ5cs&feature=related

Now in terms of the monthly log scale gold chart, this would indicate that a departure from the long term upwards channel in gold prices is in the cards, because so far the chart conforms with the rules of a three wave extension.

The conclusion I would draw from this analysis is that perhaps nobody is sufficiently prepared for the onset of a 3-wave extension in the gold bull market in terms of U.S. dollars.

Either this indicates that a brutal decline in the U.S. dollar is about to occur, or that gold prices will skyrocket in all currencies.

supersize: http://www.flickr.com/photos/11747277@N07/5398513103/sizes/l/in/photostream/

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