Gold Confirming Bottom
01/16/16 Weekly Re-Lay: “Gold & Silver are poised for a new rally, after perpetuating a ~2-week cycle…
Gold & Silver continue to validate the potential for a new advance to begin 2016. This comes after Gold twice tested its primary downside target for the year of 2015 (and its 2nd downside objective for the entire 2011–2015 decline) in Dec. – at 1033–1045.0/GC.
Gold was expected to rally from its Dec. 18th low into mid-to-late-Jan. Gold is doing just that and is capable of surging to 1125.0/GCG (or higher) – the monthly LHR – in January. As it builds more of a base, Gold is increasing the potential for a surge above that level.
In the coming week, the weekly 21 High AMAC is at 1124.3/GCG while a ‘rally = rally’ objective is around 1127.5/GCG. However, these are minimum upside objectives that should be exceeded – either on the initial test or after a brief pullback (from an initial test).
The weekly trend pattern is also coming into play. It would now only take a weekly close above 1113.1/GCG to reverse Gold’s weekly trend to up and confirm that a multi-month (possibly multi-quarter) bottom is taking hold. If that happens in the coming week, it could spur some carry-over buying into Jan. 25–29th before an initial peak.
Silver needs a daily close above 14.400/SIH to confirm an intermediate bottom and trigger an accelerated rally in the second half of January. A daily close above 14.640/SIH would be even more convincing.
3–6 month & 6–12 month traders and investors should have entered long positions in Gold & Silver near the lows and should hold them until a weekly close below the lows. (If using futures levels as trigger points, that would mean weekly closes below 1045.4/GCG & 13.635/SIH.)
The XAU remains weak, burdened by the weakness in equities. Until a daily close above 50.00, the intermediate trend is down.
It is perpetuating a ~30-degree high (Sept. 18th)–high (Oct. 15/16th)–low (Nov. 17/18th)–low (Dec. 17th)–low (Jan. 15/19th) Cycle Progression while completing a ~90-degree decline from its Oct. 15/16th peak. That could trigger a bottom near current levels.
Gold & Silver just set secondary lows, perpetuating the 14–15 day cycle that helped pinpoint the Dec. 31st low. As stated on Dec. 30th:
“While Gold was creating the spike low in early-Dec., it began what is now a 14–15 day low-low-low Cycle Progression (Nov. 18—Dec. 3—Dec. 17) that comes back into play on Dec. 31st…If Gold is forming a bottom and poised to rally into late-January (the preferred scenario), it should set a higher low at that time… and then quickly surge to new 3–5 week highs in the ensuing days.”
1–4 week traders could have bought Feb. Gold …” TRADING INVOLVES SUBSTANTIAL RISK.
Gold projecting strong advance into Jan. 28/29th. Rally above 1125.0/GCG likely. XAU poised for bottom by Jan. 19th. TRADING INVOLVES SUBSTANTIAL RISK.