A consolidation or pullback was expected to have begun. Support was expected to be about either 1,977 or 1,919. A low today at 1,907.78 is 11.22 below identified support.

Summary: The pullback may be over at today’s low. The upwards trend may resume.

Alternatively, it is possible that a wide ranging consolidation may continue for another week or two. An upwards swing may begin at today’s low.

The next longer-term target is now at  2,220 or 2,250.

Grand SuperCycle analysis is here.

Last analysis of monthly charts is here with video here.

BEARISH ELLIOTT WAVE COUNT

WEEKLY CHART

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The bigger picture for this main bearish 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. The common range for Super Cycle wave (b) is from 1 to 1.38 times the length of Super cycle wave (a), giving a range from 1,920.18 to 2,252.27. The target would see Super Cycle wave (b) end within this most common range.

Super Cycle wave (b) within Grand Super Cycle wave IV may be an incomplete double zigzag. When Super Cycle wave (b) may be complete, then this wave count expects Super Cycle wave (c) to begin and to move price below the end of Super Cycle wave (a) at 1,046.27.

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

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

Primary wave C within cycle wave y may be subdividing as an impulse. Intermediate waves (1) through to (4) within primary wave C may be complete. If it continues any lower, then intermediate wave (4) may not move into intermediate wave (1) price territory below 1,764.12.

We should always assume the trend remains the same until proven otherwise. At this stage, Gold is in a bull market.

DAILY CHART

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The daily chart shows detail of primary wave C as an incomplete impulse.

Intermediate waves (1) through to (4) within primary wave C may be complete.

If it continues lower, then intermediate wave (4) may not move into intermediate wave (1) price territory below 1,764.12.

Draw an Elliott channel: draw a first trend line from the end of intermediate wave (1) to the end of intermediate wave (3), then place a parallel copy on the end of intermediate wave (2). Intermediate wave (4) may have found support about the lower edge.

Intermediate wave (2) was a shallow double zigzag, lasting 15 sessions. Intermediate wave (4) may be complete as a deeper and quicker single zigzag. Fourth waves are most often more brief than their counterpart second wave corrections for this market, so it would look normal for intermediate wave (4) to be over here.

HOURLY CHART

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Intermediate wave (4) may be complete as a relatively quick zigzag. There is a close Fibonacci ratio between minor waves A and C within it.

Draw a best fit channel about the zigzag as shown. A breach of the upper edge of this channel would add confidence in a trend change. While price remains within this channel, it must be accepted that there is a risk here of intermediate wave (4) continuing lower.

ALTERNATE HOURLY CHART

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By simply moving the degree of labelling within intermediate wave (4) down one degree, it is possible that only minor wave A or W may be complete.

If intermediate wave (4) continues further as a flat correction, then minor wave A within it may be a complete zigzag. Minor wave B should now retrace a minimum 0.9 length of minor wave A, and may end within the common range of minor wave A noted on the chart.

If intermediate wave (4) continues further as a triangle, then minor wave A within it may now be a complete zigzag. Minor wave B may now continue higher and may make a new high above the start of minor wave A at 2,070.48 as in a running triangle.

If intermediate wave (4) continues further as a combination, then minor wave W may now be a complete zigzag. Minor wave X may now continue higher and may make a new high above the start of minor wave W at 2,070.48.

ALTERNATE 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 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 bear wave count above). 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.

Within the first flat correction labelled primary wave W of the double flat of cycle wave II, intermediate wave (B) is 1.69 the length of intermediate wave (A). This is longer than the common range of up to 1.38, but within an allowable guideline of up to 2. The length of intermediate wave (B) reduces the probability of this wave count.

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

DAILY CHART

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Cycle wave III may be continuing higher. The daily chart focusses on primary wave 5 within cycle wave III.

Draw an Elliott channel about intermediate wave (3): draw the first trend line from the end of minor wave 1 to the end of minor wave 3, then place a parallel copy on the end of minor wave 2. Minor wave 4 may have found support today about the lower edge of the channel.

If minor wave 4 continues lower, then it may not move into minor wave 1 price territory below 1,764.12.

HOURLY CHART

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Minor wave 4 may be complete at today’s low. It may also continue further  sideways as a more time consuming consolidation in the same manner as outlined in the alternate hourly chart for the bearish wave count.

TECHNICAL ANALYSIS

WEEKLY CHART

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

The trend is very extreme and RSI is deeply overbought. The Shooting Star candlestick last week is a bearish reversal pattern that should be given weight in these conditions.

DAILY CHART

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Today’s strong downwards session has brought RSI back into neutral territory, but ADX is still elevated. Look for support about 1,800. From a classic analysis point of view, it would be reasonable to expect downwards movement to continue towards support. This does not support the short-term conclusion from the Elliott wave count.

GDX WEEKLY CHART

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

A Shooting Star is a bearish reversal pattern. With RSI reaching overbought, this may indicate a trend change. A trend change may be either a 180° change or a change to a sideways consolidation.

GDX DAILY CHART

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

Price may have curved down to back test support about 37.50 after the upwards breakout. This would be typical behaviour. There is a little further room for price to fall to support. Thereafter, it may move up and away.

Published @ 07:47 p.m. ET.

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New updates to this analysis are in bold.