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A strong upwards movement was expected on Friday. This is what happened, but then price reversed and retraced almost all of the upwards movement.

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 1,244.72 on Monday, then a new alternate may be unfolding. It expects downwards movement to end about 1,237 to 1,235 on Thursday.

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.

Some confidence may be had in this wave count if a new high above 1,261.93 occurs on Monday. If this wave count is correct, then that price point should be passed easily on Monday.

Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1,244.72. If that price point is passed on Monday, then the alternate below may be favoured. However, before invalidation, this wave count would substantially reduce in probability if price breaks below the pink base channel drawn here about minute waves i and ii. If this wave count is correct, that trend line should offer very strong support.



Gold Elliott Wave Chart Daily 2017
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The prior alternate daily wave count was invalidated on Friday with a new high above 1,263.64.

This alternate daily wave count is new and 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 next 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
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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.

Minuette wave (iv) may not move into minuette wave (i) price territory above 1,261.93.

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 this 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. This 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 back within the prior range, but has a very strong spike above it. The support for upwards movement during Friday’s session from volume is bullish.

On Balance Volume gives yet another bullish signal. On Balance Volume remains strongly bullish at the daily chart level. This indicator is given much weight; it usually works well with trend lines for Gold.

ADX is bullish.

ATR is neutral. RSI is neutral.

Stochastics is bearish. Bollinger Bands contracting on Friday is a little bearish. The very long upper wick on Friday is fairly bearish.

Overall, this chart is more bullish than bearish.

Trading advice:

Profitable long positions may have stops moved up to breakeven to eliminate risk. The larger trend is most likely still up and corrections offer an opportunity to join the trend. Always use a stop. In this case, it should be at breakeven or preferably just below 1,250.48 now. Do not invest more than 1-5% of equity on any one trade.

More cautious traders may still like to wait for a classic breakout before entering the new trend. A classic breakout is a close above resistance or below support, on a day with increased volume. Friday is not a classic breakout.



GDX Daily 2016
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Friday is not a classic breakout because price has closed back within the prior consolidation zone. Friday’s session would more accurately be interpreted as an extension of the consolidation.

On Balance Volume for GDX remains very bullish. Volume for recent movement is still strongest for upwards days, so this too is bullish.

ADX and ATR are neutral.

Stochastics and Bollinger Bands are bearish.

Overall, GDX is more bullish than bearish. But price action during Friday is concerning for bulls.

This analysis is published @ 11:10 p.m. EST on 8th April, 2017.