Elliott Wave And Gold
by Horatio Miller
Ask any Elliott Wave analyst about the outlook for gold, and he will without doubt say that the
precious metal is on its way down to the $100-200 range. A divergent-Elliott Wave interpretation,
however, suggests that over the near term, gold will rally to the area between $633.78 and $662.29.
This hypothesis is supported by a wave count that classifies the 1980-90 drop in the price of gold as an
unfinished zigzag correction. Within this interpretation, cycle wave A of the zigzag ended when London
gold fell to $284 on February 25, 1985. Cycle wave B of the zigzag is still in progress. It is this wave that
should carry gold over the $600 threshold.
A detailed look at London gold from 1980 to 1990 will confirm this forecast. Supercycle wave (II), the
decline in the price of gold from the 1980 top, began in the typical manner of a zigzag, with five
descending waves that formed cycle wave A (Figure 1). This wave finished on February 25,1985, the day
that London gold dropped to $284. Cycle wave A is followed by cycle wave B, three ascending waves
that are still in the process of unfolding. Cycle wave B started with primary wave a, five rising waves that
ended at $479.95 on May 20, 1987 (Figure 2). Primary wave b, a correction, took the form of what R.N.
Elliott called a double-three, and it terminated at $345.25 on June 14, 1990 (Figure 3). (Editor's note:
Since we cannot reproduce the circled letters necessary to Elliott theory, we are instead using boldface