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Price has moved slightly below the target on the alternate hourly wave count, which was at 1,244. The next 24 hours should provide clarity.

Summary: If upwards movement breaks above the channel on the hourly chart, then the main wave count should be used. A low may be in place and long positions should be entered with stops just below the last low.

If the next session prints a red daily candlestick below the base channel on the main daily chart, then the weekly alternate will become the new wave count and Gold would be expected to be in a new downwards trend to new lows.

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 chart steps back to see all movement since the important low on the 3rd of December, 2015.

To see how this fits into the bigger picture, please see the last historic analysis linked to at the start of this analysis.

The first upwards movement labelled primary wave 1 fits well as a five wave impulse. Primary wave 2 fits as a zigzag. It would be difficult to see the downwards wave of primary wave 2 as an impulse because that would require ignoring what looks very much like a triangle at its start (labelled intermediate wave (B) ). To see this as an impulse that movement would need to be a second wave correction, but second waves do not subdivide as triangles.

Primary wave 3 should have begun. Within it intermediate waves (1) and (2) should be complete. Intermediate wave (2) is a very common expanded flat correction.

The middle of this big third wave looks unlikely to have passed, so it is still ahead.

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. Price is finding resistance at the cyan trend line now. If price can break through resistance here after some consolidation, then that may release energy to the upside for the end of minor wave 3.


Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

This daily chart will suffice for both weekly charts, which can be seen in the last published historic analysis.

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.

Price has moved lower today below the target on yesterday’s alternate at 1,244. So far price is 7.19 below that target and has overshot the lower edge of the base channel. If this main wave count is right, then the low must be in for Gold. A third wave at three degrees must begin here, and tomorrow must see a green daily candlestick for Gold.

Minor wave 2 may not move beyond the start of minor wave 1 below 1,195.22. However, if the base channel provides support, price should not get close to this invalidation point. Only if the base channel is breached by a full daily candlestick below and not touching the lower edge would a bearish wave count be considered.

The gold best fit channel about minor wave 2 is shown on the daily chart today, so that members may see how it is drawn.


Gold Elliott Wave Chart Hourly 2017
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The base channel is breached at the hourly chart level, but for this wave count to be discarded or revert to an alternate it must be properly breached at the daily chart level. The lower edge of the channel has been slightly breached on the hourly chart before; this line is not perfectly showing where support is (only a general area). The overshoot on the daily chart is a little concerning but not enough to discard this wave count.

The structure of minor wave 2 as a complete double zigzag may again be seen as complete. Today’s downwards movement may be a selling climax at the end of the pullback.

For confidence that a low is in place, members may want to wait to see if price can break above the upper edge of the channel on this hourly chart.

If price continues lower from here for the next 24 hours, then the base channel on the daily chart would be breached and the alternate weekly chart below would become the new main wave count.


Gold Elliott Wave Chart Weekly 2017
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Primary wave 2 may be complete as a double zigzag.

If a full daily candlestick is printed below the lower edge of the base channel on the main daily Elliott wave count, then this alternate would be the new main wave count.

If price makes a new low below 1,195.22, then this alternate would be considered confirmed.



Gold Weekly 2017
Click chart to enlarge. Chart courtesy of

There are a lot of assumptions out there about Gold and its relationships to various other markets. Happily, there is a quick and easy mathematical method to determine if Gold is indeed related to any other market: StockCharts have a “correlation” option in their indicators that shows the correlation coefficient between any selected market and the one charted.

The correlation coefficient ranges from -1 to 1. A correlation coefficient of 1 is a perfect positive correlation whereas a correlation coefficient of -1 is a perfect negative correlation.

A correlation coefficient of 0.5 to 1 is a strong positive correlation. A correlation coefficient of -0.5 to -1 is a strong negative correlation.

Any two markets which have a correlation coefficient that fluctuates about zero or spends time in the 0.5 to -0.5 range (shown by highlighted areas on the chart) may not be said to have a correlation. Markets which sometimes have a positive or negative correlation, but sometimes do not, may not be assumed to continue a relationship when it does arise. The relationship is not reliable.

For illustrative purposes I have included the correlation coefficient between Gold and Silver, which is what strong and reliable correlation should look like.

Volume for last week suggests the downwards movement is a pullback, and it may still continue further as volume remains fairly heavy.

Gold has made a series of higher highs and higher lows since the low in December 2016, the definition of an upwards trend. Assume the trend remains the same until proven otherwise.

This weekly chart still remains mostly bullish with some neutrality.


Gold Daily 2016
Click chart to enlarge. Chart courtesy of

After hours has seen further downwards movement, so far to reach just below support about 1,240.

Some increase in volume today supports downwards movement. This may be a small selling climax, or equally as likely it may be a strengthening downwards trend. ADX, ATR and Bollinger Bands still indicate overall this is more likely to be a pullback within a larger upwards trend than it is to be a healthy downwards trend. A healthy trend should have increasing range, increasing volatility, and increasing volume.

There is room for price to fall further. Stochastics exhibits no divergence with price and RSI is not yet oversold.


The next 24 hours should provide clarity between the two wave counts: either a very bullish main count or a very bearish alternate. It would be most wise to wait patiently for this clarity.

If choosing to take a punt on the long side, reduce position size here to about 1-2% of equity. Alternatively, members may like to hedge here: stops for longs may be about 1,231 and stops for shorts may be about 1,259.

Always follow my two Golden Rules for risk management.

1. Always use a stop.

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



GDX Daily 2016
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The bearish signal today from On Balance Volume should be given weight. It changes the balance in this chart from neutral / bearish to more bearish.

The long upper wick on this last daily candlestick is very bearish.


Gold Daily 2016
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This study of a third wave will be left in daily analysis until the current third wave is either proven to be wrong (invalidated) or it is complete.

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 @ 07:35 p.m. EST.