An inside day with light volume supports the first Elliott wave count.

Summary: The first wave count now expects a downwards trend to new lows. The second wave count expects a deep second wave correction as a pullback within a bull market.

The first wave count is bearish for the bigger picture and classic technical analysis supports this view. This wave count expects 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 target is at 2,094.

Grand SuperCycle analysis and last monthly charts are here.

FIRST ELLIOTT WAVE COUNT

WEEKLY CHART

Click chart to enlarge.

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

Click chart to enlarge.

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 incomplete 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.

Redraw the channel about minute wave c of minor wave 4 using Elliott’s second technique. Draw the first trend line from the ends of minuette waves (ii) to (iv), then place a parallel copy on the end of minuette wave (iii). Minuette wave (v) may end mid way within this channel. When the channel is breached by subsequent downwards movement, then that may indicate that the bounce may be over.

HOURLY CHART

Click chart to enlarge.

Minor wave 4 may be an incomplete flat. Minute wave c within minor wave 4 may be an incomplete impulse.

Within minute wave c: Minuette waves (i) through to (iv) may be complete, and minuette wave (v) may be underway.

If minuette waves (i) through to (iv) are correctly labelled (these can be seen on the daily chart), then minuette wave (iii) is shorter than minuette wave (i) by 6.28. This limits minuette wave (v) to no longer than equality in length with minuette wave (iii) at 1,832.57, so that minuette wave (v) is not the longest actionary wave within the impulse of minute wave c and the core Elliott wave rule is met.

Within minuette wave (v): subminuette waves i and ii may be complete, and subminuette wave iv may not move into subminuette wave i price territory below 1,797.05.

SECOND ELLIOTT WAVE COUNT

WEEKLY CHART

Click chart to enlarge.

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

Click chart to enlarge.

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 recalculated 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. If this channel is breached by upwards movement with at least one full daily candlestick above and not touching the upper edge of the channel, then that may provide confidence in this second Elliott wave count. The upper edge of this channel at this stage is not properly breached, but it may be breached tomorrow.

Minor wave 1 may be an incomplete impulse.

HOURLY CHART

Click chart to enlarge.

Minor wave 1 may be incomplete.

Minute waves i through to iv within minor wave 1 may be complete (these may be seen on the daily chart). Minute wave iii is 6.28 short of minute wave i. For minute wave iii to not be the shortest actionary wave within the impulse, minute wave v is limited to no longer than equality in length with minute wave iii at 1,832.57.

If price moves above 1,832.57 without a pullback prior, then this wave count would be more bullish in expecting an extended third wave.

Minuette wave (iv) within minute wave v may not move into minuette wave (i) price territory below 1,797.05.

TECHNICAL ANALYSIS

WEEKLY CHART

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

Although last week volume has slightly declined, it remains heavier than immediately prior upwards weeks. Resistance about 1,800 has held.

DAILY CHART

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

Resistance at 1,800 has been breached on an upwards day that has support from volume.

The short-term volume profile now agrees with ADX. There is an upwards trend that has room to run before conditions become extreme. This chart now leans towards supporting the second Elliott wave count.

GDX WEEKLY CHART

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

Last week a bearish reversal pattern in an Evening Star has support for the third downwards candlestick. Price has turned down from resistance. The bounce looks to be over.

GDX DAILY CHART

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

GDX may be within a new upwards trend.

Published @ 08:45 p.m. ET.

—

Careful risk management protects your trading account(s).

Follow my two Golden Rules:

1. Always trade with stops.

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

—

New updates to this analysis are in bold.