A new low below 1,806.79 indicates the Elliott wave counts expect a high is in place. Downwards targets may now be used.

Summary: Both the main and alternate Elliott wave counts expect downwards movement to a target at 1,731 or 1,568. 

Grand SuperCycle analysis and last monthly charts are here.

MAIN 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.

Double flats are fairly rare structures. The probability of this wave count is further reduced.

Cycle wave IV may be a complete triple zigzag. Triple zigzags are not rare structures, but they are not common. The probability of this wave count is further reduced in Elliott wave terms. This is one reason why an alternate is still considered.

Cycle wave V may have begun. Within cycle wave V: Primary wave 1 may be over at the last high, and primary wave 2 may not move beyond the start of primary wave 1 below 1,677.64.

DAILY CHART

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A target is calculated for cycle wave V. If this target is wrong for this wave count, then it may be too low. As price approaches the target, if the structure is incomplete, then a higher target may be calculated.

Primary wave 1 within cycle wave V may be complete.

Primary wave 2 may be an incomplete zigzag. Intermediate wave (B) within primary wave 2 may be a complete double combination.

Intermediate wave (C) should make at least a slight new low below the end of intermediate wave (A) at 1,752.19 to avoid a truncation. At 1,731 intermediate wave (C) would reach 0.618 the length of intermediate wave (A).

HOURLY CHART

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Intermediate wave (C) may have begun. Intermediate wave (C) would be very likely to make at least a slight new low below the end of intermediate wave (A) at 1,752.19 to avoid a truncation. Intermediate wave (C) would reach 0.618 the length of intermediate wave (A) at 1,731.

Intermediate wave (C) may only subdivide as a five wave motive structure. Minor wave 2 within intermediate wave (C) may not move beyond the start of minor wave 1 above 1,832.17.

ALTERNATE ELLIOTT WAVE COUNT

WEEKLY CHART

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The bigger picture for this alternate Elliott wave count sees Gold as 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).

Super Cycle wave (c) may have begun with a leading expanding diagonal for cycle wave I. Leading expanding diagonals in first wave positions are uncommon, so the probability of this wave count is reduced. However, it has a good fit and must be considered.

Second wave corrections to follow leading diagonals in first wave positions are usually very deep. Cycle wave II is deep and the structure may be complete; so far it is following a common pattern. If it continues higher, then cycle wave II may not move beyond the start of cycle wave I above 2,070.78.

DAILY CHART

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A target is calculated for cycle wave III.

Primary wave 2 may be a complete double combination. Primary wave 3 downwards may have just begun.

If it continues higher, then primary wave 2 may not move beyond the start of primary wave 1 above 1,915.42.

At 1,568 primary wave 3 would reach 1.618 the length of primary wave 1.

HOURLY CHART

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Primary wave 3 may only subdivide as an impulse. Minor wave 2 within the impulse may not move beyond the start of minor wave 1 above 1,832.17.

Primary wave 3 may exhibit an increase in downwards momentum and may have support from volume. Primary wave 3 may last a few months.

TECHNICAL ANALYSIS

WEEKLY CHART

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For recent weeks, volume has been strongest in the last downwards week. This is slightly bearish.

Price has not been able to break below and remain below support about 1,800. On Balance Volume suggests upwards movement here is limited.

DAILY CHART

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The upwards swing may have ended with Stochastics short of overbought. Resistance may be about 1,840 and support about 1,790.

GDX WEEKLY CHART

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Stochastics reached oversold in the last downwards swing, but price did not quite reach support. Now an upwards week suggests an upwards swing may continue until price reaches resistance and Stochastics reaches overbought.

GDX DAILY CHART

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Price is consolidating with resistance about 35 and support about 33.0. A breakout is required before confidence in the next direction may be had.

An upwards swing within the consolidation is now underway. Price is now very close to resistance at 35 and Stochastics is close to overbought. The upwards swing may end soon.

Published @ 06:15 p.m. ET.

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New updates to this analysis are in bold.

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