Gold & XAU Signaling 1 – 2 Month Peaks; Pullback Should Precede Rally into March ’20.
01/08/20 Weekly Re-Lay Alert – The 90/10 Rule, Weekly & Monthly Extremes and Gold: “Gold & Silver surged into Jan. 6 – 10, perpetuating multiple weekly Cycle Progressions and setting the stage for an intermediate peak (see opening comments). It would take daily closes below 1519.7/GCG & 17.83/SIH to turn the intra-month trends down and validate that scenario.
1 – 4 week traders could have exited the second half of long positions in Feb. Comex Gold futures w/avg. gains of about $4,500/contract – resulting in an overall avg. gain of about $4,225/contract for the entire long position…
The XAU fulfilled its weekly trend buy signal (generated in mid-Oct.) by surging to new multi-year highs and the highest level since Aug. ’16 – into Dec. 31/Jan. 2. It attacked its weekly & monthly LHRs while fulfilling upside targets at 105.71 – 107.14/XAU.
It set its highest close at the upper end of that target range and spiked to within 2.0 points of 110.0 – a 1 – 2 year upside objective dating back to 2018. As a result, a multi-week peak was expected to take hold. That was quickly confirmed last week.
It is possible that peak fulfilled projections for a ‘5th’ wave advance (stemming from its Sept. ’18 low) into early-2020. Like Gold, the XAU traced out a textbook Elliott Wave formation with the Oct. low representing the ’4th’ wave low of an overall 5-wave advance.
The XAU’s recent ’4th’ wave decline almost perfectly matched the magnitude of the previous ’2nd’ wave decline – providing additional corroboration to this wave interpretation since those two corrective waves are often of similar magnitude.
[Feb. – May ‘19 decline (’2nd’ wave) from 80.76 to 65.85 = drop of 14.91 points. Aug.. – Oct ‘19 decline (’4th’ wave) from 102.29 to 86.84 = drop of 15.41 points.]
Those two corrective wave lows – 65.85 & 86.84/XAU – also created a clear-cut 3 – 6 month (and wave-related) LLH projection at 107.83/XAU. (86.84 – 65.85 = 20.99 / 86.84 low + additional 20.99 = 107.83/XAU.)
That coincided with the primary Elliott Wave upside objective (‘5th’ wave = ‘1st’ wave magnitude, projecting a peak around 107.01/XAU) and was reinforced by weekly & monthly LHRs hit in late-Dec. and the overall ~110.0/XAU objective for this advance from Sept. ’18.
All of that synergy, in such a tight range, helped pinpoint the XAU peak at 108.35, with its highest daily close at 107.17/XAU. It reversed lower – again leading Gold – and quickly turned its daily trend down. It reinforced that today, by turning its intra-month trend down.
The early-Jan. peak was/is expected to trigger a pullback into mid-Jan. – 90 degrees/3 months from the mid-Oct. ’19 low. ~98.00/XAU is 2 – 4 week support and could be tested as part of this correction. It would still take substantial work to confirm that the ‘5th’ wave peak is intact, with one of the earliest signs being (if it occurred) a weekly close below 98.10/XAU.”
Gold, Silver & XAU confirming analysis for 1 – 2 month peak, fulfilling weekly & monthly cycles and reaching multi-month and multi-year upside targets. Precious metals remain on track for overall advance into March 2020.
How Long Should Correction Last… Before Rally into March ‘20?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.