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The target at 1,279 was expected to be a little low. A trend line higher up was expected to halt upwards movement. However, this is not what has happened, and the trend line is overshot.

The main Elliott wave count is changed today.

Summary: An upwards trend now looks likely to be in place. Price is at resistance and shows a slight decline in volume today; look out for a pullback about here which may end about either 1,280 or 1,266 and last about two to three days. If this is how price behaves, it may offer us an entry opportunity to join the upwards trend. The final target is now at 1,320.

Always use a stop. Invest only 1-5% of equity on any one trade.

New updates to this analysis are in bold.

Last monthly charts and alternate weekly charts are here, video is here.

Grand SuperCycle analysis is here.



Gold Elliott Wave Chart Weekly I 2017
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The Magee bear market trend line is added to the weekly charts. This cyan line is drawn from the all time high for Gold on the 6th of September, 2011, to the first major swing high within the following bear market on the 5th of October, 2012. This line should provide strong resistance.

At this stage, a triangle still looks possible and has the best fit for cycle wave b. It has some support from declining ATR and MACD now beginning to hover about zero.

Within a triangle, one sub-wave should be a more complicated multiple, which may be primary wave C. This is the most common sub-wave of the triangle to subdivide into a multiple.

The wave count today is changed at the weekly chart level to see primary wave C an incomplete double zigzag. The material change is to see intermediate wave (X) over later as a regular flat correction. Intermediate wave (Y) now looks like a developing zigzag at the weekly chart level, and minor wave B within it shows up with one red weekly candlestick. Primary wave C may end at the Magee trend line.

Primary wave D of a contracting triangle may not move beyond the end of primary wave B below 1,123.08. Contracting triangles are the most common variety.

Primary wave D of a barrier triangle should end about the same level as primary wave B at 1,123.08, so that the B-D trend line remains essentially flat. This involves some subjectivity; price may move slightly below 1,123.08 and the triangle wave count may remain valid. This is the only Elliott wave rule which is not black and white.

Triangles normally adhere very well to their trend lines. With the A-C trend line in yesterday’s analysis now strongly overshot, that labelling of primary wave C now looks wrong. This is the reason for the change today.

Finally, primary wave E of a contracting or barrier triangle may not move beyond the end of primary wave C above 1,295.65. Primary wave E would most likely fall short of the A-C trend line. But if it does not end there, then it can slightly overshoot that trend line.

Primary wave A lasted 31 weeks, primary wave B lasted 23 weeks, and primary wave C may now be in its 34th week. A double zigzag may be expected to be longer lasting than single zigzags within a triangle, and so this continuation of primary wave C is entirely acceptable and leaves the wave count with the right look at this time frame.


Gold Elliott Wave Chart Daily 2017
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The last two upwards days have necessitated a change to the wave count. A new target for primary wave C to end is calculated using the most common Fibonacci ratio between minor waves A and C.

Within minor wave C, no second wave correction may move beyond the start of its first wave below 1,252.39.

Minor wave C may only unfold as a five wave structure, either an impulse or an ending diagonal. An impulse is much more common and will be expected until shown otherwise by price.

Within an impulse for minor wave C, the corrections of minute waves ii and iv would most likely show up on the daily chart, like they do within minor wave A. Minute waves ii and iv within minor wave A both lasted two sessions, so they may also last about two to three sessions within minor wave C.

Minute wave ii may reasonably be expected to begin about here, with price at the upper edge of the Elliott channel providing resistance.

Minute wave ii may be used as an entry opportunity to join the current upwards trend.


Gold Elliott Wave Chart Hourly 2017
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Downwards movement looks like it may be beginning to break below the gold best fit channel about minute wave i. Price may have found some resistance about the upper edge of the blue Elliott channel, copied over from the daily chart.

Minute wave ii may correct to either the 0.382 or 0.618 Fibonacci ratios, with the 0.618 Fibonacci ratio favoured. It may be choppy and overlapping, lasting about two to three days.

Minute wave ii may not move beyond the start of minute wave i below 1,252.39.

Thereafter, upwards movement should continue and should show an increase in momentum, if this wave count is now correct.



Gold Elliott Wave Chart Weekly I 2017
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This wave count has been published only in historical analysis. At this stage, it will be published on a daily basis.

There are more than 23 possible corrective structures that B waves may take, and although cycle wave b fits best at this stage as a triangle (main wave count), it may still be another structure. This wave count looks at the possibility that it may be a double zigzag.

If cycle wave b is a double zigzag, then current upwards movement may be part of the second zigzag in the double, labelled primary wave Y.

The target remains the same as previously published for this wave count.

Along the way up, some resistance should be expected at the cyan Magee trend line. Because this wave count requires price to break above the Magee trend line, it must be judged to have a lower probability for this reason. This trend line is tested multiple times and goes back to 2011. It is reasonable to expect price to find resistance there, until proven otherwise.

Within intermediate wave (C), no second wave correction may move beyond the start of its first wave below 1,205.41.


Gold Elliott Wave Chart Daily 2017
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Intermediate wave (C) may be unfolding as an impulse.

Only minor wave 1 may have been over at the last high. Minor wave 2 may have begun. Minor wave 2 today may be continuing further as an expanded flat correction. It would be possible to label it over at the last low, but that would see minor wave 2 remarkably brief and shallow. It would still have better proportion and be of more normal depth if it continued as a very common expanded flat.

Minor wave 2 may not move beyond the start of minor wave 1 below 1,205.41.


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

Minor wave 2 may be continuing as an expanded flat subdividing 3-3-5.

Minute wave b may be complete and may be slightly longer than the normal range for B waves of flat corrections.

A target is now calculated for minute wave c to exhibit a reasonably common Fibonacci ratio to minute wave a.



Gold Weekly 2017
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An upwards week closes with a red weekly candlestick.

To correctly analyse volume for this week it should be done at the daily chart level, to look “inside” the week.

On Balance Volume gives no signal. It is constrained.

ADX and ATR both support the main weekly Elliott wave count. This is what a triangle should look like.


Gold Daily 2016
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Stepping back and looking at the larger consolidation, Gold moved into a range back in February this year, delineated by support and resistance zones. During this consolidation, it is two upwards days of 7th of April and the 17th of May that have strongest volume. This suggests an upwards breakout is more likely than downwards. With the main Elliott wave count now expecting a small false upwards breakout, this now may make more sense.

However, this signal is not a strong one. The third strongest day of the 18th of May is a downwards day, and it is very close in volume to the two upwards days.

Bearish divergence between price and RSI is disappearing; it is now very weak. Bearish divergence still exists between price and Stochastics. This supports the idea of a pullback about here.

On Balance Volume at resistance also supports the idea of a pullback here.

ADX now supports both wave counts. Both see an upwards trend continuing further. MACD also supports both wave counts.

A member has asked about the correlation between Gold and the S&P500. While my wave count for Gold now expects more upwards movement and my wave count for the S&P500 now expects downwards movement, this may alleviate members concerns. However, these two markets are absolutely not correlated. Any correlation which may appear from time to time is unreliable and vulnerable to a complete shift. A correlation coefficient which is between 0.5 and -0.5 shows two sets of data which are not correlated. The correlation coefficient between Gold and the S&P500 is currently close to zero.



GDX Daily 2016
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Stepping back for GDX too, to look at the past six months, a large descending triangle looks like it has formed and may be close to a breakout. Breakouts from descending triangles are usually downwards.

During this structure though it is an upwards day for the 15th of March that has strongest volume suggesting an upwards breakout may be more likely than downwards. This signal is also not a strong one for GDX. The next two strongest days are both downwards and both very strong.

Price has gapped upwards today to close above the triangle trend line on a day with an increase in volume. This looks like a classic upwards breakout. Expect price may now curve down to test support at the triangle trend line, before moving up and away. That would be typical behaviour. If price does behave like that, it may offer an entry opportunity to join the upwards trend after some confidence in a breakout. Stops may be set just below the triangle trend line. Today’s breakaway gap may also be used for stops. If this is indeed a breakaway gap, it should not be closed. The gap has its lower edge at 22.71. Patience is required for this trade set up.

Published @ 10:55 p.m. EST.