Summary: Longer term, I am still very Bullish on Gold but we need to first confirm that it’s longer Intermediate Cycle Low (ICL) has formed before I back up the truck. My 9 Year Weekly chart below-showing Gold forming a Bull Flag below multi-year resistance). Monday is also OPEX expiration for the metals, where they are often slammed lower, so I felt it was time to take my chips off the table until I see how Monday and perhaps next week plays out. Should Gold break its last low early next week, my plan would be to short it into what would more likely be an ICL. Should we see a breakdown, my next support is at the $1,380 to $1,420 level. GDX has an open Gap at $24 which could well be hit should we move lower next week.
Gold & PMs: Gold D.8 looks weak thus far and has not even tested the 50ma on its Daily chart yet. While that can change, the USD is bouncing and with OPEX on Monday, it was time to stand aside and seek more clarity. You see when Gold is bearish late in an Intermediate Cycle, its shorter Trading Cycles (TCs) often top early (before D.11) providing time for a more nasty move into its longer ICL. We now have a potential top on D.6, price action formed a swing high and closed below the 10ma this week. Again, price action could turn more bullish next week but the market needs to prove it. Should we move lower, the next turn catalyst on the calendar is the Fed meeting is on December 11th so we shall see.
Gold W.29 and in my timing band to find an ICL but one has not yet been confirmed. Gold has formed a weekly swing low but needs a weekly close back above its 10wma near $1,493 as a next confirmation step followed by the next TCL forming a higher low. My Weekly chart below is a 1.6 year that provides the next Fib level supports. Should we move lower, 1370-1380 is very strong support.
GDX closed above its 10ma but remember that Gold is the cycle driver. Neither Gold or GDX has moved above the 10wma on the Weekly chart just yet (my GDX chart is a Daily).
USD Update: The USD’s 15 Year Cycle is the longest I track. My first chart below shows why, despite the current uptrend, I am Bearish longer term on the Dollar and expect that it will top soon.
Closer in I have the USD D.4 now that we have formed a swing and closed well above its 10ma. I can now label D.20 as Trading Cycle #1 (TCL1). USD W.4 after W.17 hosted another relatively short ICL. If we have really formed a Double Top, the USD would roll over relatively soon before taking out resistance near the Double Top (Perhaps during this next Trading Cycle?). If correct, I would expect TC2 to top between 98.80 to 99 which is where a head & shoulders topping pattern would form with the double top as the Head.
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