Last week’s action saw gold forming its peak for the week in last Monday’s session, here doing so with the tag of the 1256.60 figure (February, 2019 contract).
From there, a gentle correction was seen into late-week, with that decline coming as the result of a smaller 10-Day component – though with the upward phasing of the larger 34 and 72-Day cycles seen as pointing higher now.
Gold Timing Index Up to Date
With the action seen last week, of particular note is that our gold Timing Index has recently pushed back to higher highs – along with price action – which is seen as a net positive for the preciou Yellow metal.
The Gold Timing Index is a Key indication of trend direction for the medium-term, with the Gold/CPI ratio being our longer-term indication. As noted in past articles, the last signal from our mid-term indicator was seen following the February, 2018 price peak, coming on February 8th, 2018, with the metal trading at the 1346 figure at that time.
Going further with the above, since no intervening buy signal has been given with the Gold Timing Index, the last mid-term sell signal is actually still in effect, we are likely to get another mid-term sell signal before any new buy signal appears.
The Gold Cycles
Even with the mid-term trend seen as pointing south from February of 2018, the smaller-degree 34 and 72-Day cycles are pointing higher, ideally holding up into later this month.
Here is the smaller 34-Day cycle:
The larger channel that encompasses the much bigger 154-Day component is still pointing higher now, an assessment which favors the next Southward phase of the smaller 34-Day component to end up as a counter-trend affair. In terms of time, the next trough for that 34-Day wave is due around the 1st week or so of January.
Near term in Jim Curry’s Gold Wave Trader report last week he noted that a minor cycle Southward phase was due to materialize with the smaller 10-Day wave, with the decline phase of this component now seen as in progress, have a look:
In terms of price, Mr. Curry noted that a decline back to the 20-Day MA was likely to materialize (due to a larger, but less dominant 20-Day cycle), which was seen with the action into Friday. With this 10-Day wave now 12 trading days along, it is at or into normal bottoming range, and we should be looking for its low to soon form.
Stepping back a bit, the 3 cycles above the 10 and 20-Day waves are each seen as pointing higher at the present time, and with that we should look for the current 10-Day Southward phase to end up as a counter-trend affair – which means that gold should remain above the 1216 figure (February, 2019 contract), which is the prior 10-Day trough.
Stepping back a bit further, if the above is correct, and the current Southward phase of the 10-Day cycle is able to end up as counter-trend – then the probabilities will favor a push back to or above the 1256.60 swing top on the next Northward phase of the 10-Day wave. That move would then be the odds-on favorite to peak the larger 34-Day wave, for a correction into the first week or so of January.
So, now we have several Key turning point dates coming up in the next few weeks.
For the stepped-back view, the next mid-term peak should is expected to come from the bigger 154-Day cycle, which is shown below:
Price: the expected driver for the 154-Day cycle called for a rally back to the 154-Day MA, which was tapped in the recent action. The Northward phase of this cycle is likely to peak either with the current upward phase of the 34-Day cycle, or else on the one that follows, following the expected decline into early-to-mid January.
It is too early to tell with any degree of certainty. Until then, it would take a reversal below the 1203.00 figure (February, 2019 contract) to confirm this 154-Day wave to have topped.
Gold: The Bottom Line
The bottom line for gold is that a short-term correction phase is seen as in force with the smallest-tracked cycle, the 10Day component. The ideal path would be for this decline to end up as counter-trend, to be followed by higher highs on the next swing up; then to be on the lookout for technical indications of a peak forming with the larger 34-Day component, and – potentially – the even-larger 154-Day wave.
Have a terrific week
Latest posts by Paul Ebeling (see all)
- F1: Hanoi to Host Vietnam Grand Prix Kick-off Event - April 21, 2019
- Ferrari (NYSE:RACE) ‘Tailor Made’ Build Your Own Supercar - April 21, 2019
- Box Office: ‘The Curse of La Llorona’ Tops Easter Weekend with $26.5-M - April 21, 2019