Gold Builds on a Bullish Sequence - 1110 Key Level

We wrote a couple weeks back on Gold breaking out to the upside. After giving the market a few days to develop its waves, it appears a bullish 5-3 sequence has unfolded to the upside. This presents a higher probability scenario that we may see at least one more 5 wave sequence higher.

That means we probably have room to $1190 if not higher based on the longer term count from 2 months ago.

Wave Count - Suggests at least 1 more 5 wave sequence higher

Wave Measurements - A move above $1200 builds the case we are in wave iii. Traders can add to their position at that point.

Sentiment - SSI is showing +1.35 which is fairly tame. We saw in late August the SSI reading turn negative and I would anticipate a similar outcome if this move develops.

Bottom line, we're anticipating a wave iii move towards $1245 while $1090 holds.

Also, based on our other bearish views on EURUSD and GBPUSD, buying Gold while selling EUR or selling GBP (essentially long Gold/EUR or long Gold/GBP) may be a paired trade to consider as well.