Select Page

Upwards movement continues and price has remained within the upper half of the channel on the hourly chart, which was expected at this stage.

Trading advice is given to members to manage long positions towards the end of this week.

Summary: In the short term, a shallow consolidation may unfold for Friday and Monday while NYSE is closed for Easter. Thereafter, the upwards trend may be expected to continue because it is not yet extreme and the Elliott wave structure is incomplete. A blow off top is fairly likely to be ahead, maybe to the end of next week. The target for now is still at 1,333. If it is adjusted, it may be moved higher.

New updates to this analysis are in bold.

Grand SuperCycle analysis is here.

Last monthly and weekly charts are here.



Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

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. It is most likely a third wave because cycle wave a is most likely to subdivide as an impulse.

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), minor waves 1 and 2 are now complete. Minor wave 3 looks to have begun. Within minor wave 3, no second wave correction may move beyond its start below 1,240.24.

A cyan trend line is added to all charts. Draw it from the high in October 2012 to the high in July 2016. This line has been tested five times. When price gets back up to this line, it is likely to offer strong resistance.

The cyan trend line is still some distance away. This may be where minor wave 3 ends, or it may be only where minute wave iii within minor wave 3 ends.


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

The middle of the third wave may not yet have passed. It may pass tomorrow or Monday, but with these days being public holidays that seems unlikely. The alternate hourly chart below may actually have a higher probability. The end target remains the same.

If the middle of the third wave has not yet passed, then within it micro wave 2 may not move beyond the start of micro wave 1 below 1,272.79. However, for micro wave 2 to continue lower or even sideways would begin to be disproportionate. It is most likely that micro wave 2 is over for this first hourly chart.

If price moves sideways or slightly lower, then the second hourly chart would be preferred.

The acceleration channel is the same as the Elliott channel on the alternate hourly chart.


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

It is possible that the middle of the third wave has passed, but strongest movement would still be expected to be ahead. The strongest portion of upwards movement may be minuette wave (v), or minute wave v, or minor wave 5. One of these may end with a blow off top.

If minuette wave (iv) is over here, then it may be a completed regular flat correction. If it continues further, it may morph into a combination or a triangle.

Minuette wave (iv) may not move into minuette wave (i) price territory below 1,269.72.



Gold Weekly 2017
Click chart to enlarge. Chart courtesy of

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
Click chart to enlarge. Chart courtesy of

I do not have confidence in the data from StockCharts for the daily candlestick for the 12th of April. As the session ended, I did not see a spike down to 1,278, which is their close, and creates the long upper wick on their candlestick.

Technical analysis of yesterday’s candlestick will use BarChart data which more closely mirrors how I saw the session end.

BarChart data also shows an increase in volume for the last three upwards sessions, whereas StockCharts data shows a decline in volume. The third wave study below shows that some decline in volume during the early stages of a big third wave is entirely possible.

The doji for Thursday represents a pause and is not a reversal signal. It may be followed by a shallow consolidation before price moves higher. Only if it is followed by a strong red daily candlestick, may it be part of a reversal signal, an evening doji star.

Gold has broken above a prior strong resistance zone at 1,265. If price does come down back to this area, it should now provide strong support.

On Balance Volume is bullish. ADX is bullish. Bollinger Bands today are bullish.

The full daily candlestick above the upper edge of Bollinger Bands is a concern. Price may yet continue higher, but it is reasonably likely that tomorrow may see some shallow consolidation to resolve this.


Stops may be moved up to 1,269.72 to protect a reasonable profit, or members may prefer to set stops just below the mid line of the parallel channel on the hourly chart (this risks being whipsawed out only to see price move strongly higher). Each time price comes down towards the mid line of the parallel channel on the hourly chart may present another opportunity to join the trend.

Profit targets may be set at 1,333 in the first instance.

As always, risk management is the single most important aspect of trading. Take it seriously. My two Golden Rules are:

1. Always use a stop.

2. Invest only 1-5% of equity on any one trade.



GDX Daily 2016
Click chart to enlarge. Chart courtesy of

The 200 day moving average may be providing some resistance for Thursday. The doji represents a pause and should not be read as a reversal signal.

Downwards movement during Thursday’s session has the balance of volume lower. Coming with a decline in volume, downwards movement did not have support from volume during Thursday’s session. This is at least slightly bullish.

RSI and ADX are not yet extreme. Expect this trend to continue.

Look for price to possibly curve down to test support at prior resistance, about 23.75. This does not always happen, but it happens often enough for it to be a tendency to look out for.

Although Stochastics is overbought, this oscillator may remain extreme for long periods of time during a strong trend.

This trend still looks young despite Stochastics being overbought. RSI is not yet extreme and ADX is not extreme. Today’s longer lower wick on the daily candlestick looks bullish.


Gold Daily 2016
Click chart to enlarge.

This third wave spans 59 trading days.

It was not until the 40th day that the overlapping ended and the third wave took off strongly.

The middle of the third wave is the end of minute wave iii, which ended in a blow off top.

There is excellent alternation between second and fourth wave corrections.

This third wave began with a series of five overlapping first and second waves (if the hourly chart were to be added, it would be seven) before momentum really builds and the overlapping ends.

The fifth wave of minuette wave (v) is the strongest portion.

This third wave curves upwards. This is typical of Gold’s strong impulses. They begin slowly, accelerate towards the middle, and explode at the end. They do not fit neatly into channels. In this instance, the gold coloured curve was used.

Gold Daily 2016
Click chart to enlarge. Chart courtesy of

This trend began after a long consolidation period of which the upper edge is bound by the blue trend line. After the breakout above the blue trend line, price curved back down to test support at the line before moving up and away.

RSI reaches overbought while price continues higher for another five days and RSI reaches above 85. The point in time where RSI reaches overbought is prior to the strongest upwards movement.

ADX reached above 35 on the 9th of February, but price continued higher for another two days.

The lesson to be learned here: look for RSI to be extreme and ADX to be extreme at the same time, then look for a blow off top. Only then expect that the middle of a big third wave is most likely over.

The end of this big third wave only came after the blow off top was followed by shallow consolidation, and more highs. At its end RSI exhibited strong divergence with price and On Balance Volume gave a bearish signal.

Third waves require patience at their start and patience at their ends.

This analysis is published @ 01:25 a.m. EST on 14th April, 2017.