Elliotologist Says Gold Due For A Rebound

Using Elliot Wave analysis, Dave Banister says gold has met its bottom and is due for a rebound. Last Thursday's bottom of $1,310 meets the criterion for a potential Fibonacci pivot point.

Now, as you can see above we did end up dropping back down from $1,345 an ounce to $1,310 last week and pivoted higher. This confirms a possible 4th wave bottom after a 7-8 week correction period. This type of movement works off the overbought sentiment levels of traders. In addition, we had the exchanges increasing position limits in the New Year and caused some additional liquidation selling.

The long term views now are for $1287 to hold as a worst case bottom in this 4th wave, and the 5th wave to begin if it has not already to over $1,500 per ounce at the next interim highs. I expect this could take quite a few months before we can even consider attacking the $1430 areas, but in time we should climb back above that wall.... The general advise for traders is to take a long position with a stop at $1285, but add to your position on any tests of $1310 and down to $1287.

He's also convinced that gold's in a thirteen year bull market, much like the tech sector in the late '80s and '90s. Using his timeline, gold now is where tech stocks were in 1997.