Downwards movement fits both Elliott wave counts, but on the daily chart a bearish candlestick pattern fits the first Elliott wave count.

Summary: The first wave count now expects the bounce is over and a downwards trend to new lows may begin from here. The short-term target is now at 1,646. A multi-year bear market may be in its early stages to end below 1,046.

A long-term target is at 657.

The second wave count is bullish. A new upwards wave may now have begun. The short-term target is at 1,952. The longer-term target is at 2,094. There is now some technical support for this second wave count.

Grand SuperCycle analysis and last monthly charts are here.

FIRST ELLIOTT WAVE COUNT

WEEKLY CHART

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The bigger picture for this first Elliott wave count sees Gold as now 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 both of minor wave 5 or intermediate wave (5) may exhibit this tendency; there may be one or more selling climaxes along the way down.

Draw an acceleration channel about downwards movement. Draw the first trend line from the end of primary wave 1 to the last low, then place a parallel copy on the end of primary wave 2. Keep redrawing the channel as price continues lower.

Minor wave 4 may be a complete flat. It has now breached resistance close to the upper edge of the cyan Acceleration channel. This channel was breached previously in early January 2021 yet price continued lower, so the channel breach on its own is not enough to discard this wave count.

Minor wave 4 may not move into minor wave 1 price territory above 1,849.22. A new high above 1,849.22 would see this bearish wave count discarded.

The small channel about minute wave c is redrawn for better technical significance. Draw the first trend line from the start of minute wave c to the low of minuette wave (ii) within it, then place a parallel copy on the high of subminuette wave iii within minuette wave (i). This channel neatly contains all of minute wave c and shows where upwards movement found resistance. If this channel is breached by downwards movement, then it may indicate a potential trend change. Copy this channel over to the hourly chart. If this wave count is correct, then this channel may be breached by the end of this week.

HOURLY CHART

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Minor wave 4 may be a complete flat. Minute wave c within minor wave 4 may be a complete impulse.

The green channel is copied over from the daily chart. It perfectly shows where price found resistance at the end of minor wave 4. If the channel is breached by downwards movement, then that may indicate a trend change.

If minor wave 4 continues any higher, then it may not move into minor wave 1 price territory above 1,849.22.

If minor wave 4 is complete, then minor wave 5 may have begun. Minor wave 5 may only subdivide as a five wave motive structure at minute degree.

Today labelling within the start of minute wave i is changed. Minuette wave (i) may be a short impulse and minuette wave (ii) may be a completed expanded flat. Within the expanded flat, the end of subminuette wave b is a 1.40 length of subminuette wave a, just slightly beyond the most common range of up to 1.38. Subminuette wave c has moved slightly above the end of subminuette wave a, avoiding a truncation and a very rare running flat.

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 may be a complete triple zigzag. The rarity of triple zigzags reduces the probability of this wave count further.

If the third zigzag of primary wave Z continues lower, then 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 a complete triple zigzag.

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. Cycle wave IV looks normal with a clear downwards slope.

A target is calculated for cycle wave V.

Primary wave 1 within cycle wave V may be incomplete.

Within primary wave 1: Intermediate waves (1) and (2) may be complete, and within intermediate wave (3) minor wave 2 may not move beyond the start of minor wave 1 below 1,678.24.

A best fit channel is drawn about cycle wave IV. This channel is breached by upwards movement with at least one full daily candlestick above and not touching the upper edge of the channel, which provides a little confidence in this second Elliott wave count.

Minor wave 1 may be an incomplete impulse.

HOURLY CHART

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Minor wave 1 may be incomplete.

Minute waves i and ii within minor wave 1 may be complete. Minute wave iii may be incomplete. Minute wave iii may only subdivide as an impulse. Minuette wave (iv) within minute wave iii may not move into minuette wave (i) price territory below 1,797.05.

Downwards movement is labelled as minuette wave (iv) for this wave count, which fits as a double zigzag. This piece of movement now fits both wave counts well.

TECHNICAL ANALYSIS

WEEKLY CHART

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Last week has been a significant upwards week. Price has closed above prior resistance at 1,800 with strong support from volume. The +DX line has crossed above the -DX line, indicating a potential trend change to upwards, but with ADX declining no clear trend is indicated.

DAILY CHART

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There are now two bearish candlestick reversal patterns at the last high: an Advance Block pattern now followed today by a Bearish Engulfing pattern that fully engulfs the real bodies of the two prior candlesticks (although they are very small). This bearish pattern has support from volume. It is possible the bounce is over, or a small pullback may continue prior to a new upwards trend continuing. ADX is now extreme, but RSI did not reach overbought. There is still room for an upwards trend to continue.

GDX WEEKLY CHART

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Despite a bearish candlestick reversal pattern the week before last, last week price has moved higher with support from volume, closing above resistance. Next resistance is at 45.55.

GDX DAILY CHART

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Technically, at the last high is a Dark Cloud Cover bearish reversal pattern. But the real body of the prior candlestick it has closed within is so small the pattern is weak.

Yesterday’s session is inconclusive. The session moved price lower but closes with a strong green daily candlestick. Weak volume did not push price lower nor did it push price higher.

Again today completes another inconclusive session. A higher high and a higher low completes an upwards day, but the candlestick closed strongly red. An increase in volume may be downwards volume within the session.

Published @ 08:05 p.m. ET.

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New updates to this analysis are in bold.