Upwards movement was expected.

Summary: A bounce may continue for a few more days now. A target for resistance is at 1,853 to 1,855.

When this bounce may be complete, then a very strong downwards wave may begin.

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. Within primary wave 2: Intermediate wave (A) may be complete, and intermediate wave (B) may unfold over a few weeks. Thereafter, intermediate wave (C) may continue lower and should make a new low below the end of intermediate wave (A) to avoid a truncation. When the end of intermediate wave (B) and the start of intermediate wave (C) is known, then the Fibonacci ratio between intermediate waves (A) and (C) may be used to calculate a target for intermediate wave (C).

Within intermediate wave (B): Minor waves A and B may now both be complete, and minor wave C may now continue higher towards the target zone.

Primary wave 2 may not move beyond the start of primary wave 1 below 1,677.64.

HOURLY CHART

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Minor wave C may continue higher towards the target zone. Minor wave C must subdivide as a five wave motive structure. Minute waves i and ii within minor wave C may be complete.

Minute wave iii must subdivide as an impulse. Within minute wave iii: Minuette waves (i), (ii) and (iii) may be complete, and minuette wave (iv) may not move into minuette wave (i) price territory below 1,814.01.

Draw an Elliott channel about minute wave iii. Draw the first trend line from the ends of minuette waves (i) to (iii), then place a parallel copy on the end of minuette wave (ii). If minuette wave (iv) continues further, then it may find support about the lower edge of the channel. Minuette wave (v) may end either mid way within the channel or at resistance at the upper edge. When minuette wave (v) may be complete, then a breach of the channel by downwards movement may indicate minute wave iii may be over and minute wave iv may have arrived.

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 1 within cycle wave III may be complete.

Primary wave 2 may last weeks to months. A target for it to end is now at 1,853 to 1,855.

Primary wave 2 may not move beyond the start of primary wave 1 above 1,915.42.

Primary wave 2 may be subdividing as a zigzag. Intermediate wave (B) within primary wave 2 may now be complete.

HOURLY CHART

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Intermediate wave (C) must subdivide as a five wave motive structure, most likely an impulse. Minor waves 1 and 2 within intermediate wave (C) may be complete.

Minor wave 3 may only subdivide as an impulse. Within minor wave 3: Minute waves i, ii and iii may be complete, and minute wave iv may also be complete. But if minute wave iv is not complete and continues further, then it may not move into minute wave i price territory below 1,814.01.

Draw an Elliott channel about minor wave 3. Draw the first trend line from the ends of minute waves i to iii, then place a parallel copy on the end of minute wave ii. If minute wave iv continues further, then it may find support about the lower edge of the channel. Minute wave v may end either mid way within the channel or about the upper edge at resistance. When minute wave v may be complete, then a breach of the channel by downwards movement may indicate minor wave 3 may be complete and minor wave 4 may then be underway.

TECHNICAL ANALYSIS

WEEKLY CHART

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Volume declines last week as price moves higher and On Balance Volume is at resistance. Price may react downwards this week.

DAILY CHART

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Upwards movement has not yet reached resistance although Stochastics is now overbought. Stochastics may remain overbought for a little longer while price continues to resistance. The upwards swing may be now close to an end.

Resistance about 1,850 fits reasonably well with the Elliott wave target at 1,853 to 1,855. The lower edge of this range may be preferred.

GDX WEEKLY CHART

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There is no bullish reversal pattern at this last low, but now two bullish long lower wicks suggest at least a little more upwards movement ahead.

GDX DAILY CHART

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Price is consolidating with resistance about 35 and support about 33.3. A breakout is required before confidence in the next direction may be had.

Published @ 06:46 p.m. ET.

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New updates to this analysis are in bold.

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