Gold recovered nicely over the last two weeks; this was expected on account of the completed five wave decline in black wave 3. If our count is correct, then the current pull-back is corrective wave 4, part of a larger incomplete decline in wave 5) of C. Note that now we can already count three legs up from the lows, which means that market could turn bearish very soon, ideally from around the 1300-1310 resistance area. However, only price can confirm a downtrend, which means a minor impulse down back to 1200. If this occurs, we will look for a decline in the 5th wave towards 1100 level or even lower. For now, the critical region stands at 1336 as wave 4 cannot trade into a wave one territory.

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