With New York closed today, Gold moved sideways in a very small range.

The Elliott wave counts remain the same.

Summary: The main wave count is bullish. A short-term target is at 1,987. The longer-term target is at 2,094 although this may need to be revised higher.

For the short term, while price remains above 1,867.82, assume the upwards trend remains in place. A new low below 1,867.82 may indicate another fourth wave correction may have begun. A sideways consolidation may then find support about the lower edge of either of the channels on the daily charts.

An alternate Elliott wave count is considered, but it has a low probability. It expects upwards movement to overall continue to a target at 1,940. The invalidation point for this alternate wave count is at 2,070.48.

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.

Cycle wave IV may be a complete triple zigzag.

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.

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 intermediate wave (3) may only subdivide as an impulse.

A target is calculated for intermediate wave (3) that expects minor wave 5 within it to exhibit the most common Fibonacci ratio to minor wave 1.

Intermediate wave (4) may not move into intermediate wave (1) price territory below 1,739.19.

For the short term, a new low below 1,867.82 would indicate intermediate wave (3) may have been over at the last high and intermediate wave (4) may then be underway. If this happens, then intermediate wave (4) may be expected to find support at the lower edge of the redrawn acceleration channel.

HOURLY CHART

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Assume the trend remains the same until proven otherwise. This analysis assumes there is an upwards trend in place.

Minor wave 5 must subdivide as a five wave motive structure, most likely an impulse. Minute wave ii within minor wave 5 may not move beyond the start of minute wave i below 1,867.82. Minor wave 5 may unfold over a few more weeks.

If minor wave 5 is continuing, then minute waves i and ii within minor wave 5 may now be complete. Minute wave iii may be extending, and minuette wave (i) within it may be incomplete. Subminuette wave i within minuette wave (i) may be complete. Subminutte wave ii may be complete at today’s low, or it may continue lower to end closer to either the 0.382 or 0.618 Fibonacci ratios of subminuette wave i. Subminuette wave ii may not move beyond the start of subminuette wave i below 1,885.27.

Minor wave 5 may find resistance at the upper edge of the redrawn acceleration channel. If it does, then it may have ended at the last high, falling short of the target. The degree of labelling within minor wave 5 may need to be moved up one degree.

Sometimes for Gold its fifth waves to end third wave impulses one degree higher can be quite strong, so minor wave 5 may breach the upper edge of the pink Elliott channel and may exhibit an increase in momentum and volume.

If price invalidates this short-term wave count with a new low below 1,867.82, then minor wave 5 and intermediate wave (3) may be over and intermediate wave (4) may continue for about two to four weeks. Intermediate wave (4) may end within the price territory of the fourth wave of one lesser degree. The price territory of minor wave 4 is from 1,886.87 to 1,854.64.

ALTERNATE ELLIOTT WAVE COUNT

WEEKLY CHART

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The bigger picture for this alternate 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. 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 primary wave 1. Leading expanding diagonals in first wave positions are uncommon, so the probability of this wave count is low. 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. Primary wave 2 may be expected to end at least about the 0.618 Fibonacci ratio at 1,920.42, and more likely a reasonable amount deeper than that. Primary wave 2 may not move beyond the start of primary wave 1 above 2,070.78.

DAILY CHART

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Intermediate wave (C) may be subdividing as an impulse. Minor wave 4 within intermediate wave (C) may not move into minor wave 1 price territory below 1,757.92.

A target is now calculated for intermediate wave (C).

Minor wave 3 within intermediate wave (C) may be over at the last high. Minor wave 4 may now unfold over a few days to about two weeks. Minor wave 4 may end within the price territory of the fourth wave of one lesser degree. Minute wave iv has its price territory from 1,886.87 to 1,854.64; within this territory, the 0.236 Fibonacci ratio of minor wave 3 at 1,867.56 is a reasonable target.

TECHNICAL ANALYSIS

StockCharts data is New York session only. With New York closed today for Memorial Day, there is no new data to analyse.

MONTHLY CHART

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With New York closed on Monday for Memorial Day, data for May is close enough to completion for analysis.

April completed an upwards month that closed as a Bullish Engulfing candlestick pattern. Importantly, however, the pattern lacked support from volume and confidence may not be had in it.

May now (almost complete) forms a strong bullish candlestick that has strong support from volume. ADX is extreme, but RSI is not overbought. There is room for this upwards trend to continue.

WEEKLY CHART

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There is an upwards trend now in place. However, two sessions in a row with declining volume now signal some weakness. A consolidation or pullback within the trend may occur here.

DAILY CHART

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The upwards trend is now very extreme and RSI is overbought. However, when Gold has a strong trend, these indicators may reach very extreme while price travels a considerable distance.

With weak volume and declining ATR while RSI is overbought and ADX is extreme, the risk here of a pullback or consolidation developing is reasonable. It looks like this is what may be happening; it may continue for a few more days to relieve extreme conditions before the trend continues.

GDX WEEKLY CHART

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Next resistance is at 45.55.

Upwards movement continues. If there is an upwards trend, then the trend would be in its very early stages; there is plenty of room for it to continue.

GDX DAILY CHART

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

A pennant may again be identified. Pennants are continuation patterns. A target from the flag pole is calculated at 43.59.

Published @ 06:27 p.m. ET.

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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.

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