Gold, Silver & XAU Prepare For Drop
09/17/16 Weekly Re-Lay:
“Gold & Silver continue to adhere to the outlook for 3Q 2016 – topping in early-July, then dropping sharply into late-August – and down to 1–2 month targets – and then rebounding into early-Sept. That was/is expected to usher in another drop, potentially lasting into early-Oct.
Gold rebounded to a combination of weekly LHRs at 1347–1357.1/GCZ (extreme intra-week upside objectives) and attacked monthly resistance as Silver did the same… both creating the ideal setup for a new leg down, which has since taken hold. As explained before, this retracement has the potential to stretch into Nov. 2016.
With respect to that correction, Silver has been trading in a very ‘Gann-like’ manner. By that, I am referring to the Gann principle of markets moving in equal ‘chunks’ (layman’s terms) or ranges. In this case, it is an approximately 2.50/SI range that has divided the moves in Silver.
Although it stretches before then, Jan. 2015 is where I will begin this discussion. At that time, Silver peaked at ~18.50/SI after a sharp 6-week rally. It then began its final descent to ~13.50/SI– a drop of roughly 5.00 (2 xs 2.50).
It’s very last drop was from ~16.00 to ~13.50 – splitting that 5.00 range in half and culminating its drop with a final, ~2.50 sell-off.
Silver then surged to ~16.00 – an advance of ~2.50/SI – before consolidating.
After finally exceeding that initial peak, Silver surged above 18.00, though it did not quite reach18.50/SI – the next level.
It then pulled back to ~16.00/SI and then surged to ~21.00/SI, a blow-off rally of ~5.00. That eventually gave way to the July–August drop to… you guessed it… ~18.50/SI – a pullback of ~2.50/SI.
The point?
If Silver gives a weekly close below 18.50/SIZ – as is expected – it would likely see a quick drop to ~16.00/SIZ, a level that also represents its ‘4th wave of lesser degree’ support.
[Further validating this trading range sequence, 2011–2012 saw multiple tests of key support at~26.00/SI, creating lows in Jan. ’11 (before its final surge), in Sep. & Dec. ’11 (after its peak), and then in June & July ’12.
26.00/SI is two multiples above the recent 21.00/SI peak and 3, 4 & 5 multiples – of 2.50/SI – above 18.50/SI, 16.00/SI & 13.50/SI. When Silver finally broke through that support, it plummeted right to ~18.50/SI, where it found support for the ensuing year.]…
The XAU fulfilled analysis for a bounce into Sept. 7–14th, peaking on Sept. 8th. It has since dropped back toward its recent lows and is still expected to extend this overall decline into late-Sept./early-Oct. – the next phase of a ~4-month (16–19 week) high-high-low-low-low-(low) Cycle Progression.
That would also perpetuate an over-arching, 36-week high-low-(low) Cycle Progression. A test of78–83.00/XAU is possible in that time frame. A daily close below 91.48/XAU is needed to confirm a new leg down…
Gold & Silver turned right back down after fulfilling analysis for a brief rebound from late-August(daily) cycle lows into Sept. 6–9th. They have since resumed their downtrends and could see another drop into early-October.
If they manage to give daily closes below their Sept. 1st lows, Gold & Silver could accelerate down to ~1260.0/GC & ~16.00/SIZ.”
Gold, Silver & XAU perfectly fulfilling 3Q 2016 Roadmap. Next phase = Sharp drop into early-October – with Gold’s downside target for that period at 1260.0/GC. Silver’s ultimate downside target – by Nov. 2016 – is ~16.00/SI. Gold Stocks remain poised for new downdraft.
See publications for additional analysis & trading strategies. Also, see 40-Year Cycle: Golden Years & 2016 – The Golden Year Reports for details on outlook for late-2016 into 2018 (and beyond).