Downwards movement continues as expected for the first preferred Elliott wave count.

Summary: The first wave count is bearish for the bigger picture and has only one daily chart. This wave count expects a multi-year bear market may be in its early stages to end below 1,046.

Downwards momentum may show a further increase. A short-term target is at 1,645. A long-term target is at 657. Some confidence may now be had in this bearish wave now that price has made a new low below 1,766.53. This wave count may be discarded if price makes a new high above 1,957.87.

The second wave count is bullish for the bigger picture but now bearish for the short to mid term. A new target for a reasonably rare triple zigzag to end is at 1,737 to 1,723.

Grand SuperCycle analysis is here.

Last analysis of monthly charts is here.

FIRST ELLIOTT WAVE COUNT

WEEKLY CHART

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The bigger picture for this first Elliott wave count sees Gold as still within a bear market, in a three steps back pattern that is labelled Grand Super Cycle wave IV on monthly charts. Grand Super Cycle wave IV may be subdividing as an expanded flat pattern.

Super Cycle wave (b) within Grand Super Cycle wave IV may be a complete double zigzag. This wave count expects Super Cycle wave (c) to move price below the end of Super Cycle wave (a) at 1,046.27 to avoid a truncation and a very rare running flat. The target calculated expects a common Fibonacci ratio for Super Cycle wave (c).

DAILY CHART

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Within a new bear market, cycle wave I may be an incomplete five wave impulse.

Cycle wave II within the new downwards trend may not move beyond the start of cycle wave I above 2,070.48.

Gold typically exhibits extended and strong fifth waves; this tendency is especially prevalent for fifth waves to end third wave impulses one degree higher. One or more of minute wave v, minor wave 5 or intermediate wave (5) may exhibit this tendency; there may be one or more selling climaxes along the way down. Minute wave iv and minor wave 4 may be relatively brief and shallow.

A best fit channel is drawn as shown. The upper edge may be used as a guide for resistance of any deeper bounces. The lower edge is no longer showing where price is finding resistance or support.

No second wave correction within sub-micro wave (3) may move beyond the start of its first wave above 1,815.10.

A new swing low below 1,766.53 adds reasonable confidence to this wave count.

HOURLY CHART

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Sub-micro waves (1) and (2) may be complete.

Sub-micro wave (3) may have begun and may only subdivide as an impulse. Within sub-micro wave (3): minuscule waves 1 through to 3 may now be complete, and minuscule wave 4 may not move into minuscule wave 1 price territory above 1,798.62.

Minuscule wave 4 may be expected to most likely be brief and shallow. If it continues higher, then it may find resistance about the upper edge of the best fit channel drawn on this chart.

This wave count now considers the middle of a third wave may have passed. Commodities typically exhibit stronger fifth waves than third waves, particularly within a third wave impulse. One or more of minuscule wave 5, sub-micro wave (5), micro wave 5, subminuette wave v, minuette wave (v), minute wave v, minor wave 5 or intermediate wave (5) may exhibit a strong increase in downwards momentum.

SECOND ELLIOTT WAVE COUNT

WEEKLY CHART

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This wave count sees the the bear market complete at the last major low for Gold on 3 December 2015.

If Gold is in a new bull market, then it should begin with a five wave structure upwards on the weekly chart.

Cycle wave I fits as a five wave impulse with reasonably proportionate corrections for primary waves 2 and 4.

Cycle wave II fits as a double flat. However, within the first flat correction labelled primary wave W, this wave count needs to ignore what looks like an obvious triangle from July to September 2016 (this can be seen labelled as a triangle on the second weekly chart on prior analysis here). This movement must be labelled as a series of overlapping first and second waves. Ignoring this triangle reduces the probability of this wave count in Elliott wave terms.

Cycle wave IV has moved lower, so it now must be labelled as incomplete. The only structure cycle wave IV may now be unfolding as would be a relatively rare triple zigzag. The rarity of triples reduces the probability of this wave count further.

Cycle wave IV may not move into cycle wave I price territory below 1,303.51.

DAILY CHART

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Cycle wave IV may be continuing lower as a relatively rare triple zigzag.

The third zigzag in a triple may now be completing lower. Primary wave Z may now be completing intermediate wave (C) .

Intermediate wave (C) must subdivide as a five wave motive structure.

The purpose of multiple zigzags is to deepen a correction when the first zigzag does not move price deep enough. To achieve this purpose multiple zigzags normally have a clear counter trend slope. So far cycle wave IV looks normal with a clear downwards slope.

To achieve its purpose of deepening the correction, primary wave Z may be expected to end reasonably below the end of primary wave Y.

The target zone calculated in last analysis for cycle wave IV has been passed and the structure is still incomplete. A new target is calculated.

HOURLY CHART

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The hourly chart focusses on the structure of intermediate wave (C) as an incomplete five wave impulse. Minor waves 1 through to 3 within intermediate wave (C) may be complete.

Minor wave 4 may not move into minor wave 1 price territory above 1,761.70.

SECOND ELLIOTT WAVE COUNT

ALTERNATE WEEKLY CHART

This wave count is now discarded based upon extremely poor proportion between a long and incomplete fourth wave with a brief second wave. This wave count no longer had the right look for this market.

TECHNICAL ANALYSIS

WEEKLY CHART

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There is a series of lower swing lows and lower swing highs from the last all time high in August 2020. ADX now indicates a downwards trend at the weekly time frame, and price has made another important new swing low.

RSI is not extreme. There is plenty of room for a downwards trend to continue.

A downwards trend should now be the dominant view until the trend reaches extreme and then a bullish candlestick reversal pattern is seen.

This week an increase in volume and a bearish signal from On Balance Volume support the first Elliott wave count.

DAILY CHART

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RSI is not oversold, and the trend is not extreme.

The 50 day moving average has crossed below the 200 day moving average, a “death cross”.

The trend is down and there is plenty of room for it to continue. Next support from the weekly chart is at 1,675.

GDX WEEKLY CHART

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Price is at support, so a counter trend bounce may occur here. If support is breached, then it becomes resistance. This chart is bearish.

If support at 31 is breached, then next support is about 26.3.

GDX DAILY CHART

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A target from the measuring gap is at 30.01.

Published @ 08:24 p.m. ET.

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1. Always trade with stops.

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New updates to this analysis are in bold.