have been pretty silent about gold as it has gone up and down and up and down again and again … and, most recently, it’s started back down. folks, this is a complicated correction in Gold. And, mind you, its just that – a CORRECTION in a multi year down trend. here’s the thesis – we are the last wave of a contracting triangle which will then cause a very very strong move to the upside .. but, for now, I believe that will end a C wave and the a-b (triangle) – c correction will be over and another leg down in Gold will begin. now, mind you – this is going to all take months or a year or so to complete but it’s the best interpretation that I can think of, for now … so, near term, if your bullish (which I am near term and am already long) get ready to BUY gold once this ‘e’ leg of the a-b-c-d-e triangle is complete.
CONCLUSION: the 3 waves to a new low did NOT turn out to be a “B” wave w/ a big C UP to come. However, I’m still seeing Gold carving out a bottom HERE or a little lower in the coming days/weeks. charts to follow …
the C wave that did not come did show a continual 3 wave structure making new lows … that fits the scenario of an ending diagonal which is 5 waves in nature but each leg is 3 waves. that’s what appears to be happening as of the close today.
SPOT GOLD MONTHLY:
note the blue shaded area to the bottom left of the chart
that shows the fixed price back in 1913 at 20.67.
That 20.67 “node” was the reason for the bounce at/around 1200 ending wave 3. a 50% retrace of the entire run in gold lies a little low 970. also, note the RSI.
It’s the lowest it’s been in 14 years and as PRICE makes new lows, the RSI is holding it’s levels. that’s bullish divergence. it certainly could break that shelf and blow off to the bottom but, again, we have “nice” support in/around 947-970
also, note the the thinner blue rectangle areas w/ resistance and support noted – polarity. the resistance held for 17 months.
SPOT GOLD WEEKLY
put the count on that makes the most sense. the BIG caveat to this count was/ is the top at 1920 a 3 or a 5…. really doesn’t matter that much because we are on the right side of the move but it does and will have big picture ramifications. either way, I feel confident that a 5 wave move lower is about to end.
one of the very powerful price projection target techniques is that of the fundamental frequency. we have that in the upper left corner below. You can see that the 1st FF Tgt was 1287 and that was responsible for the “shucking and jiving” we had at that level before finally breaking. the triangle formed using that level as the center . pretty cool hugh? the next target, that was hit today was 1053
note, I used 1572 NOT the lower “wick target” at 1 because of the open/closes around that level. so, 1053 might be off a little but I used what i was SEEING for that target.
one last, to balance and harmonize a move a lot of times wave 1 will equal wave 5 since 3 was so extended and powerful. Those orange arrows come right into the 946-970 level.
SPOT GOLD DAILY
I kept all of the work on the chart so you can work your way down from Monthly, Weekly to daily.
pay attention to the wave that begins w/ the dashed purple (yellow shaded box) that says “start here”
note the orange line – that is the representation of Wave 1 = Wave 5 and take us down to the 956 level.
we appear to be carving out (Turkey reference) an ending diagonal. see page 36 of EWP.
this is the same formation that we discussed about Coffee here: http://www.seeitmarket.com/coffee-futures-update-trading-price-targets-and-time-frames-14978/
BUT AGAIN, the triangle 4 is a classic PATTERN so were in the 5th wave lower.
for now, pay attention to 1044-1053 and then 940-970.
one last chart …
the entire “wave” structure that occurs is based on the initial impulse move.
in this case, the blue arrow from the top at 1920 is the “rock that hits the water” and starts all of the waves.
from there, we simply PROJECT the arcs outward using sacred geometry, musical notes, fibonacci, etc. and what we do is actually LOOK TO THE LEFT ON THE WAY UP.
It’s basically “musical polarity” in that where the arcs caused support and resistance in the past should be areas of resistance and support in the future.
also, the arcs usually have “measured moves” associated w/ them and at times the are the exact same move that occurred in the past happens in the future. shown below you’ll see another blue arrow that is associated w/ the 3rd expansion of the initial impulse.
note the orange ellipses. those are area of support and resistance that the arcs caught on the way up and on the way down.
can you trade off of this information? sometimes yes, but, what’s most important, is you can use the past to ascertain the rhythm and flow of the move.
OK, don’t shoot me … but I’m going to continue w/ the 3 waves down into a new low is in face a “B” wave and therefore the current move is wave 2 of C. AS LONG AS THE LOW of 1073 holds then this scenario is in play …
also note, in an expanded flat, 1.618*a = c is right on the 1.27 extension and ABOVE 1073.
CLIFF NOTES: a case is made, below, that inflection points in the ratio of GOLD/SILVER cause big movements in the spot gold and silver prices. Also, it appears that Gold lags. We are at a resistance level which “might” be one of those inflection points so expect the metals to get moving NOW or SOON. Probability points “lower” across the board for the metals.
Ratio Analysis – we love using the patterns w/ ratio analysis and, of note, is the noticeable strength in Gold vs Silver the past couple weeks. So, our first chart is going to be the relative strength of spot gold / spot silver. Basically, when the candles are going DOWN then SILVER is “stronger” and when the candles are going up GOLD is “stronger.” After looking at this chart one thing stood out … it really didn’t matter which direction the relative strength ratio was moving, but when the ratio shifted and one of the assets noticeable started to our perform or under perform THEN we had an inflection point in silver. Below you will see a set of three charts showing you the PATTERNS that were present in these ratio’s which, if we knew about them, might have helped us position ourselves – based on other patterns and technical factors — on the long or short side of the spot silver or spot gold market or both.
so where are we now …? Just using basic measured moves we can see that EVERY move in this ratio has been “used” before so our trick is to find out which one might work or not. Note the downward blue and orange arrows … then note the crash and how the vectors were almost perfect. so … we “should” do either the black or the purple measured move UP –right? note we are at the .618 of the gold/silver ratio and the black arrow would take us up to the .786. One of those two levels “should” hold and cause an inflection in the ratio. See below:
so – now that we can see resistance ahead, has the ratio really helped pinpoint inflection points?
what about Gold? Well, take a peak … the key thing I see is that while it’s not as “precise” from a timing perspective it appears that GOLD LAGS THE INFLECTION IN THE RATIO …
here’s the daily:
Now, let’s take a look at the metals individually. Folks, below is a great chart .. it shows the pegged price of gold from 1913 and, guess what, roughly 1200 is the .382 retracement. So, in the context of this long run in gold prices (100 years in the making) Gold is holding the .382 retracement which is EXTREMELY BULLISH. So, if you don’t believe me here’s the chart:
if we do break that level – look for 950-1000. Spot silver – sticking w/ my guns here and a buy at 14.
Copper – folks, still sticking w/ a MAJOR 5 wave move in copper complete. More to the downside and, remember, how FXI (China) likes/mirrors copper ….
CLIFF NOTES: prior Gold work – http://bartscharts.com//?s=gold
CLIFF NOTES 2: 1370 will be key to the last leg of a triangle, thrust DOWN and out of the triangle and then a BUY.
CLIFF NOTES 3: note the first chart. Again, it’s ratio analysis of GLD vs SPY. What we are looking for is a PATTERN to show a SHIFT in the relative strength of one security versus another. In this case, the S&P 500 has out performed, tremendously, the GLD since 08/2011. But look what just happened .. we completed a pattern at the .786 and 3 weeks ago,we found support and NOW it’s starting to move UP along w/ SPOT GOLD, ABX and the overarching Gold/Silver Index. A key development …
THIS IS A CHART W/ HISTORICAL PRICES SINCE 1913
note ABX – Barrick Gold is confirming this move … a revisit of our BUY recommendation. ( http://bartscharts.com/2014/05/21/abx-buy/ )
After the Silver post the inquiries regarding Gold have flooded in … so, in part 1 we’ll take a look at the Gold/Silver Index. The $XAU is the Philidelphia Gold/Silver Index and consists of 16 precious metal miningcompanies. This index and the $BUGS are the two most watched precious metal indices in the world. The index and the spot prices of Gold and Silver have moved in sync, nicely at the low in 2008 and mostly on the way up and down. The interesting aspect to look at is the lagin the spot gold price once the index had reached it’s target …this is what I’m looking at for a reference point. As you can see, the recent low in/around 82 was a very strong harmonic target and fits nicely into a potential big low for the index. However, when we show spot Gold in part 2 we have the potential (which would fit nicely into our preferred sequence of events) for the Spot Gold to turn in/around here for one more low. I would like to see the $XAU consolidate/pause/bounce around the recent lows while gold finishes one final leg before beginning a POTENTIALLY explosive BULL MOVE. Stay tuned and enjoy the charts … again, know nothing about the fundamentals of the Gold metal or the 16 companies just following the bouncing ball of patterns that can make very nice entries to manage risk possible.
Will update the Spot Gold chart later this afternoon or tomorrow … back to mowing the grass.