Upwards movement finishes the week, but in contrast to last week this upwards movement has weak volume. This supports the first Elliott wave count.

Both Elliott wave counts remain valid.

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. For the short term, some confidence may be had in this wave count if price breaches the small upwards sloping green channel on the daily chart. 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 an almost 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.

Draw a trend channel about minute wave c using Elliott’s first technique for an impulse. Draw the first trend line from the ends of minuette waves (i) to (iii), then place a parallel copy on the end of minuette wave (ii). This channel neatly contains all of minute wave c. If this channel is breached by downwards movement, then it may indicate a potential trend change.

HOURLY CHART

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The green channel about minute wave c is copied over from the daily chart.

Minor wave 4 may be an almost complete flat. Minute wave c within minor wave 4 may be an almost complete impulse. There is very little room now for minor wave 4 to move into; it is close to the invalidation point.

Minor wave 4 may not move into minor wave 1 price territory above 1,849.22.

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, 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 waves (i) through to (iv) within the impulse of minute wave iii may now be complete. Minuette wave (v) may have begun.

Subminuette wave i within minuette wave (v) may be incomplete. When subminuette wave ii arrives, then it may not move beyond the start of subminuette wave i below 1,809.85.

TECHNICAL ANALYSIS

WEEKLY CHART

Click chart to enlarge. Chart courtesy of StockCharts.com.

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.

Volume this week shows a further increase, which supports the second Elliott wave count.

DAILY CHART

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There are now two bearish candlestick reversal patterns at the last high: an Advance Block pattern followed 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 that price may now turn down from here. The last upwards session with weak volume supports the first Elliott wave count. Overall, this chart offers a little more support to the first Elliott wave count.

GDX WEEKLY CHART

Click chart to enlarge. Chart courtesy of StockCharts.com.

Next resistance is at 45.55.

This week may have completed a Hanging Man bearish candlestick pattern, but the bullish implications of the long lower wick mean it requires confirmation with the following candlestick bearish. 

GDX DAILY CHART

Click chart to enlarge. Chart courtesy of StockCharts.com.

The trend is up. Next strong resistance is about 45.55.

Published @ 06:02 p.m. ET.

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1. Always trade with stops.

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

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New updates to this analysis are in bold.