It is the first day of Dec and we are greeted by the first minor degree impulse wave on the hourly chart of Gold this morning. Take not of this. 

This follows a day when Gold closed positive for the day right after touching the lower end of a Trendline of all the lows of the last 2 years. The last leg down in wave E was also preceded by a triangle shown by yellow contracting lines. Triangle precede final moves and therefore this was the last leg down for this structure. Note the RSI on the upper hand of the chart with a positive divergence. Daily momentum was already in buy mode since last week.

Now also consider that the Daily Sentiment index was already at 5% more than a week back and might have dipped lower and the chart below from EWI's Short term update shows an extreme short position by Money Managers while speculators are barely long. These are sentiment extremes that call for Medium term bottoms.

However this is likely to be more than a Medium term bottom because of the Ending diagonal at the end of the entire fall. Such a pattern only occurs at the end of a trend. And this trend was down since 2011 so we are ending an over 4 year long bear market in Gold. Unlike the wave counts above that the fall is wave A down, my markings show a complex bear market correction. The EWI count would only call for a retracement of the entire fall maybe back to 1300$ or 61.8% closer to 1585$ and would last for months. But my wave count can mean going back to and maybe above 2000$ as well. I would say keep all options open because these are unusual times and the charts below. That it is an important bottom is clearly highlighted by all the charts. My Sharekhan team is releasing a note with a target of 3300$ to start with. My wave count is below and shows an ending diagonal in wave Z of a bear merket. Wave Z is also the 5th wave of a complex correction. The implications of this are a major trend reversal on cards from here. In stocks completion of wave Z has almost always meant the start of a new bull market.

So if this does turn out to be a long term trend reversal what does it mean? I have often marked the Long term chart with a wave 4 marking for the 1980-2000 bear market in Gold. But consider this alternate, a wave 2. Why consider this? Because the fall from 1980-2000 on a long term time horizon appears like an A-B-C decline or a zig-zag that is more often seen in wave 2. The triangle in wave B is also quite perfect. So we can draw a channel around the rising trend from year 2000 and project up to 3500$, while wave 3=1 is projected at 9400$. Now frankly the marking for 1980-2000 is really of no consequence here because it wont change the forecast for the next move up. What is important is determining whether the move up in Gold from 2000 onwards ended in 2011 or is extending into a larger bull market upwards. A wave 2 marking increases that probability many fold that Gold remains in a long term up trend, 2-3 year bear markets in between are part and parcel of it. Note that the impulse wave from 2000-2011 took almost a decade, so wave 3 need not be shorter. Even if it is and takes half the time we are looking at 5-6 years for this wave up. No small feat.