The first target given in yesterday’s analysis on the hourly chart was at 1,532. Price reached 1,533.24 and then turned sharply down.

Summary: There is an upwards trend in place that is very extreme. Conditions are overbought. This can continue while price moves a considerable distance further, or a trend change may occur at any time now. Caution is warranted. Risk management is essential.

The bullish Elliott wave count expects a large interruption to the trend may now have begun. It may last about four to ten weeks and may end about 1,431.

The bearish Elliott wave count expects the upwards trend may now have ended. The first confidence point is at 1,401.30. Thereafter, a new low below 1,346.45 would see the bullish wave count discarded and a bearish wave count the only remaining count.

Grand SuperCycle analysis is here.

Monthly charts were last published here with video here.

BEARISH ELLIOTT WAVE COUNT

WEEKLY CHART

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This is now the sole remaining bearish Elliott wave count.

It is now possible that Super Cycle wave (b) is a complete double zigzag.

The first zigzag in the double is labelled cycle wave w. The double is joined by a three in the opposite direction, a triangle labelled cycle wave x. The second zigzag in the double is labelled cycle wave y.

Cycle wave y now fits as a complete zigzag.

The purpose of the second zigzag in a double is to deepen the correction. Cycle wave y has achieved this purpose.

1,401.30 is the start of primary wave C. A new low below this point could not be a second wave correction within primary wave C, so at that stage primary wave C would be confirmed as over.

A new low below 1,346.45 would invalidate the bullish wave count below and add confidence to a bearish wave count.

DAILY CHART

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Primary wave C may now be a complete five wave structure.

If there has been a trend change today, then downwards movement should unfold as a five wave structure from the high. Downwards movement should exhibit strength in either rising ATR or volume.

While price remains above the first confidence point at 1,401.30, it is also possible that primary wave C may be incomplete. Downwards movement may be a second wave correction, so the invalidation point is left at 1,920.18.

HOURLY CHART

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Intermediate wave (5) may now be a complete five wave structure. Downwards movement from the high is swift and strong, typical of the start of a first wave.

No second wave within the new downwards trend may move beyond the start of its first wave above 1,533.34.

BULLISH 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 in November 2015.

If Gold is in a new bull market, then it should begin with a five wave structure upwards on the weekly chart. However, the biggest problem with this wave count is the structure labelled cycle wave I because this wave count must see it as a five wave structure, but it looks more like a three wave structure.

Commodities often exhibit swift strong fifth waves that force the fourth wave corrections coming just prior and just after to be more brief and shallow than their counterpart second waves. It is unusual for a commodity to exhibit a quick second wave and a more time consuming fourth wave, and this is how cycle wave I is labelled. This wave count still suffers from this very substantial problem, and for this reason the bearish wave count is still considered because it has a better fit in terms of Elliott wave structure.

Cycle wave II subdivides well as a double combination: zigzag – X – expanded flat.

Cycle wave III may have begun. Within cycle wave III, primary waves 1 and 2 may now be complete. Primary wave 3 has now moved above the end of primary wave 1 meeting a core Elliott wave rule. It has now moved far enough to allow room for primary wave 4 to unfold and remain above primary wave 1 price territory. Primary wave 4 may not move into primary wave 1 price territory below 1,346.45.

Cycle wave III so far for this wave count would have been underway now for 52 weeks. It is beginning to exhibit some support from volume and increasing ATR. This wave count now has some support from classic technical analysis.

The channel drawn about cycle wave III is now an Elliott channel. Primary wave 4 may find support about the lower edge.

DAILY CHART

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Primary wave 3 may now be a complete impulse. The structure of intermediate wave (5) is now complete.

Primary wave 4 may not move into primary wave 1 price territory below 1,346.45.

Primary wave 4 may last about four to ten weeks. It may unfold as any one of more than 23 possible Elliott wave corrective structures. Primary wave 4 may end within the price territory of the fourth wave of one lesser degree; intermediate wave (4) has its range from 1,438.43 to 1,382.10.

HOURLY CHART

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Within the price territory of intermediate wave (4), from 1,438.43 to 1,382.10, lies the 0.382 Fibonacci Ratio of primary wave 3 at 1,431.45. This is the preferred target for primary wave 4.

A new trend at primary degree should begin with a five down on the hourly chart. No second wave correction within the first five down may move beyond the start of its first wave above 1,533.34.

If primary wave 4 unfolds as any one of an expanded flat, running triangle or combination, then it may include a new high above 1,533.34 within wave B or X of the corrective structure. In coming weeks the invalidation point at 1,533.34 may no longer apply (this is a short-term invalidation point only).

TECHNICAL ANALYSIS

MONTHLY CHART

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Gold has effected an upwards breakout above multi-year resistance and above the cyan bear market trend line. Price is now at strong resistance about 1,525.

The new high in price above prior highs for March / April 2018 have not been matched by new highs for On Balance Volume. This divergence is bearish and supports a bearish Elliott wave count. This divergence may be given a little weight because it is strong and evident on the monthly chart.

WEEKLY CHART

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When trends for Gold reach extreme, they can continue still for a few weeks and price can continue for a considerable distance.

When both ADX and RSI reach extreme together, then that is sometimes where a trend ends.

RSI at overbought on the weekly chart is a warning to be cautious; the trend is overbought, but at this stage there is no evidence of a trend change.

DAILY CHART

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Resistance about 1,520 to 1,525 is very strong and has not yet been overcome. A close below this range today with support from volume for downwards movement is bearish for the short term.

Technically, today’s candlestick completes a Dark Cloud Cover bearish reversal pattern, but it is not a strong one. However, it does have support from volume, so it is noted.

An upwards trend may continue, but it is now very extreme with RSI in overbought territory and now exhibiting double bearish divergence. While it remains possible that the upwards trend may yet continue for a further few weeks and conditions may remain extreme for a while longer, it is also possible that it may end at any time. Caution is still advised.

While price remains above the last swing low at 1,412.10, there is a series of higher highs and higher lows in place. A new low below 1,412.10 would be a lower low and would confirm a trend change.

GDX WEEKLY CHART

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The Dark Cloud Cover reversal pattern was followed by downwards movement in the following week.

Now a new high indicates the last pullback should be over.

Volume last week has slightly declined, but overall volume is rising with price.

The trend has further to go before it reaches extreme at the weekly chart time frame.

GDX DAILY CHART

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A consolidation may have begun. Look for support about 28.4.

The last swing low was at 26.04. A new low below this point would confirm a trend change.

Published @ 09:00 p.m. EST.

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Follow my two Golden Rules:

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.