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The breakout from a consolidation zone has still not happened. The longer price coils between support and resistance, the more violent the breakout will be.

Summary: On Balance Volume at the daily and possibly also weekly chart levels gives bullish signals for Gold. This should be given reasonable weight. The main wave count is still favoured for this reason. It expects upwards movement towards 1,333 in the first instance, with the next target at 1,392.

If price breaks below 1,247.40, then a new alternate may be unfolding. It expects downwards movement to end about 1,237 to 1,235 on Thursday.

With the low today possibly taking out some long positions, new trading advice is given today under the classic Technical Analysis section.

New updates to this analysis are in bold.

Last weekly charts are here and the last video on weekly wave counts is here.

Grand SuperCycle analysis is here.



Gold Elliott Wave Chart Daily 2017
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This daily chart will suffice for both weekly charts.

Upwards movement at primary degree is either a third wave (first weekly chart) to unfold as an impulse, or a Y wave (second weekly chart) to unfold as a zigzag. If upwards movement is a zigzag for primary wave Y, then it would be labelled intermediate waves (A) – (B) and now (C) to unfold.

Intermediate wave (1) or (A) is a complete five wave impulse lasting 39 days. Intermediate wave (2) or (B) looks like an expanded flat, which is a very common structure.

So far, within intermediate wave (3) or (C), the first wave up for minor wave 1 looks complete.

If minor wave 2 is over, then within minor wave 3 no second wave correction may move beyond the start of its first wave below 1,240.24.


Gold Elliott Wave Chart Hourly 2017
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There would now be five overlapping first and second waves for this main wave count: minuette, minute, minor, intermediate, and primary. When third waves extend in their middle (which is very common), then this is how they necessarily begin, with a series of first and second waves. At this point in the wave count, there is a winding up of potential energy that may be released in explosive upwards movement when the middle of the third wave arrives.

Gold has a tendency, typical of commodities, to exhibit very strong fifth waves. This tendency is most commonly seen for the fifth waves that end its third wave impulses. One or more of minor wave 3, intermediate wave (3), and primary wave 3 may exhibit blow off tops.

Gold often exhibits strong extended third waves and even stronger fifth waves.

No target is given for minute wave iii to end because the following correction for minute wave iv may be very brief and shallow. As the middle of the third wave unfolds corrections along the way up may be increasingly brief and shallow, offering only the briefest of opportunities to join the trend.

It is concerning for this wave count that after the shallow correction of minor wave 2 the next two second wave corrections for minute and minuette degree second waves are both deep. Minuette wave (ii) has continued lower for this wave count and is now very deep. However, price looks to have again found support at the lower edge of the pink base channel, which would be expected for this wave count.

Minuette wave (ii) should be over and should not breach the lower edge of the pink base channel. Within minuette wave (iii), the first wave of the impulse labelled subminuette wave i may be incomplete. Subminuette wave ii may not move beyond the start of subminuette wave i below 1,247.40.



Gold Elliott Wave Chart Daily 2017
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This alternate daily wave count sees minor wave 1 ending two days later than the main wave count. Thereafter, minor wave 2 may be unfolding as another expanded flat correction. Expanded flats are very common structures.

This wave count fits in terms of all subdivisions on the hourly chart. Within minor wave 2, the correction for minute wave b at 1.44 times the length of minute wave a is only a little longer than the common range of up to 1.38, but well within the allowable convention of up to 2.

This alternate wave count would expect it is very likely that downwards movement this week should continue and end at least below 1,240.24, so that minute wave c moves below the end of minute wave a in order to avoid a truncation and a very rare expanded flat correction.

The target expects the most common Fibonacci ratio for minute wave c, which coincides with a reasonably common Fibonacci ratio for minor wave 2. The target for this wave count has a good probability.

A new low below 1,240.24 would see any variation of the main wave count invalidated and provide reasonable confidence in this alternate wave count.

Minor wave 2 may not move beyond the start of minor wave 1 below 1,195.22. Downwards movement, if it continues below the target, should find very strong support at the lower edge of the black base channel. That trend line should not be breached for this wave count.


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

This alternate wave count must see recent upwards movement as the completion of minute wave b, subdividing as a zigzag.

Minute wave c must subdivide as a five wave structure, either an ending diagonal or an impulse. An impulse is the more common structure, so more likely, and at this stage that is what it looks like.

Within the impulse, minuette wave (i) may be complete and minuette wave (ii) may now move higher to complete as a zigzag. Close to the 0.618 Fibonacci ratio at 1,261 is where subminuette wave c would reach equality in length with subminuette wave a, so this looks like a reasonable target.

Minuette wave (ii) may not move beyond the start of minuette wave (i) above 1,269.72.

If downwards movement continues to Thursday the 13th of April, then minor wave 2 may complete in a Fibonacci 13 sessions total.



Gold Weekly 2017
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The relatively long upper wicks of the last two weekly candlesticks are a little bearish. The increase in volume last week is bullish.

The purple trend line on On Balance Volume has been carefully drawn to be as conservative as possible, sitting along the prior two highs. This trend line has a very shallow slope and is reasonably long held. It has only been tested twice before. It has some reasonable technical significance. Last week it is slightly breached offering a reasonable bullish signal. However, for the signal to have more weight it needs a clearer breach.


Gold Daily 2016
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Gold is still range bound. During this range, it is the upwards day of the 7th of April that clearly has strongest volume suggesting an upwards breakout is more likely than downwards.

On Balance Volume is bullish.

All other indicators today are read as neutral.

Overall, this chart is neutral to bullish. An upwards breakout does look more likely.

The support line for the small consolidation zone is redrawn today. It looks like it may have an upwards slope. This gives a bullish bias.


The longer price coils sideways, the closer and more violent the breakout may be. My advice would be to either enter a hedge, or just a long position.

A long position at this stage may have stops set just below 1,240.24, or more ideally about 1,221. The lower point would allow for the alternate to unfold and then price to turn back up; this point allows for strong support at the lower edge of the black base channel on daily charts.

A hedge may have the short with a stop just above 1,269.72 and profit target at 1,237. The long portion of a hedge may have a stop just below 1,247.40 and a profit target at 1,333.

Always use a stop. Trading without stops exposes the entire equity in your account to risk; you could lose it all.

Do not invest more than 1-5% of equity on any one trade. Adjust position size to meet this rule.



GDX Daily 2016
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The upper edge of the consolidation zone is today slightly adjusted higher to sit about 23.75.

Volume is slightly bullish. On Balance Volume is bullish. Give this indicator reasonable weight.

Overall, the picture from GDX is neutral to bullish.

This analysis is published @ 09:47 p.m. EST.