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The trend was assumed to remain downwards while price remains within the channel. A new low today continues that trend.

Summary: Assume the trend remains down while price remains below 1,272.28 and more importantly while it remains within the channel.

The target for downwards movement is now at 1,256 in the first instance, and 1,239 thereafter.

If upwards movement does break above the channel, then expect it to continue for a few days.

Always trade with stops and invest only 1-5% of equity on any one trade.

New updates to this analysis are in bold.

Last monthly charts for the main wave count are here, another monthly alternate is here, and video is here.

Grand SuperCycle analysis is here.

The wave counts will be labelled first and second. Classic technical analysis will be used to determine which wave count looks to be more likely. In terms of Elliott wave structure the second wave count has a better fit and fewer problems.



Gold Elliott Wave Chart Weekly I 2017
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There are more than 23 possible corrective structures that B waves may take, and although cycle wave b still fits well at this stage as a triangle, 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.

Within intermediate wave (C), no second wave correction may move beyond the start of its first wave below 1,205.41. However, prior to invalidation, this wave count may be discarded if price breaks below the lower edge of the black Elliott channel. If this wave count is correct, then intermediate wave (C) should not break below the Elliott channel which contains the zigzag of primary wave Y upwards.

There are two problems with this wave count which reduce its probability in terms of Elliott wave:

1. Cycle wave b is a double zigzag, but primary wave X within the double is deep and time consuming. While this is possible, it is much more common for X waves within double zigzags to be brief and shallow.

2. Intermediate wave (B) within the zigzag of primary wave Y is a double flat correction. These are extremely rare, even rarer than running flats. The rarity of this structure must further reduce the probability of this wave count.


Gold Elliott Wave Chart Daily 2017
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The analysis will focus on the structure of intermediate wave (C). To see details of all the bull movement for this year see daily charts here.

Intermediate wave (C) must be a five wave structure, either an impulse or an ending diagonal. It is unfolding as the more common impulse.

It is possible that minor wave 1 may have been over at the last high and the current pullback may be minor wave 2. Minor wave 2 may not move beyond the start of minor wave 1 below 1,205.41.

Minor wave 2 may not be over and may continue lower. This would see minor wave 2 have a better proportion to minor wave 1 in terms of duration; minor wave 1 lasted 44 days and so far minor wave 2 has lasted only 19 days. If it continues now for another 2 days, it may total a Fibonacci 21.


Gold Elliott Wave Chart Hourly 2017
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If minuette wave (c) is not complete, then only subminuette waves i and now ii within it may be over. Subminuette wave ii may be a zigzag that may have ended very close to the 0.618 Fibonacci ratio of subminuette wave i.

This hourly wave count now expects another wave down with some increase in momentum for subminuette wave iii. So far subminuette wave iii is weaker than subminuette wave i. This can happen sometimes, but because it is uncommon the probability that this portion of movement is labelled correctly must reduce. The alternate hourly chart below has a better fit with MACD, but it is an alternate because we should always assume the trend remains the same until proven otherwise.

If the target for this hourly wave count is wrong, it may not be low enough.

Subminuette wave iii may only subdivide as a simple impulse. Within it micro wave 4 may not move into micro wave 1 price territory above 1,272.28.

Price remains so far within the best fit channel, copied over from the daily chart. While price remains within that channel, then no confidence in the idea of a low in place for Gold may be had.


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

This wave count sees the subdivisions within minor wave 2 as a single zigzag, not a double. Minuette waves a and b are seen in the same position as minute waves w and x on the daily chart.

If minute wave c began at the high of the 26th of September, then it may be completing as an impulse. The choppy overlapping movement which saw BarChart data suffer from a bug may have been minuette wave (ii) within that impulse, seen here on the left hand side of the chart.

Thereafter, minuette wave (iii) may have begun.

This wave count fits neatly with MACD. Minuette wave (iii) exhibits strongest downwards momentum within minute wave c.

Minuette wave (i) may have ended at 1,285.18 and so no part of minuette wave (iv) here overlaps into minuette wave (i) price territory.

This wave count absolutely requires a breach of the best fit channel before any reasonable confidence may be had in it. Only at that stage should a low be expected to be in place.



Gold Elliott Wave Chart Weekly I 2017
Click chart to enlarge.

It is still possible that cycle wave b is unfolding as a regular contracting or barrier triangle.

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.

Intermediate wave (Y) now looks like a complete zigzag at the weekly chart level.

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.

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 lasted 38 weeks.

The A-C trend line now has too weak a slope. At this stage, this is now a problem for this wave count, the upper A-C trend line no longer has such a typical look.

Within primary wave D, no part of the zigzag may move beyond its start above 1,357.09.


Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

This second wave count expects the new wave down may be deeper and longer lasting than the first wave count allows for.

A common length for triangle sub-waves is from 0.8 to 0.85 the length of the prior wave. Primary wave D would reach this range from 1,170 to 1,158.

If primary wave C is correctly labelled as a double zigzag, then primary wave D must be a single zigzag.

Within the single zigzag of primary wave D, intermediate wave (A) is labelled as an incomplete impulse.

Within intermediate wave (A), minor wave 1 will fit as a five wave impulse. The labelling within this downwards movement is changed today.

Minor waves 1 through to 4 may be complete. Intermediate wave (A) may now be in a final extended fifth wave. It is common for commodities to exhibit strong and extended fifth waves.


Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

This wave count requires an increase in downwards momentum for the middle of a third wave within the extended wave of minor wave 5.

Within the middle of this wave, subminuette wave iv may not move into subminuette wave i price territory above 1,272.28.

If price does move above this point and then breaks out above the best fit channel, then intermediate wave (A) would be labeled as over and a bounce to last two to three weeks for intermediate wave (B) would be expected.

At that stage, draw a Fibonacci retracement along the length of intermediate wave (A) and use the 0.382 and 0.618 Fibonacci ratios as targets for intermediate wave (B) to end. Each target is equally likely.



Gold Weekly 2017
Click chart to enlarge. Chart courtesy of

Support of the Elliott wave counts which expect overall more downwards movement this week comes from an increase in volume last week for downwards movement, a bearish upper candlestick wick, and a weak bearish signal now from On Balance Volume.

These signals cannot tell us how far price may fall though. Support and resistance may be used as a guide for this. Next strong support for price is about 1,225.


Gold Daily 2016
Click chart to enlarge. Chart courtesy of

The volume profile today is bullish for the very short term; more support yesterday for upwards movement and now less support today for downwards movement.

On Balance Volume is constrained. The last signal given was bearish.

Divergence today with price and Stochastics is not enough to have any confidence in a low in place. Stochastics may remain extreme for longer and divergence before a turn is usually stronger than this.

There is room still for price to fall here. While weakness is developing, it is not yet clear enough to expect a low.



GDX Daily 2016
Click chart to enlarge. Chart courtesy of

In the short term, the volume profile for GDX is unclear. Both upwards and downwards movement lack support from volume. This bounce may not be quite complete.

Look for resistance about 23.85 if the bounce continues.

The trend remains down. Assume it remains down until proven otherwise. Bounces are an opportunity to join the trend, but manage risk diligently because this trend is extreme.

Like Gold, GDX did not exhibit any divergence with Stochastics at the last low nor did RSI reach oversold. There is room for price to move lower.

Published @ 10:25 p.m. EST.