Gold & Silver ‘Sweet Spot’; Projected Surge May 3 – 5 on Track; Buy Signals Intact.
04-11-23 – Gold, Silver & Elliott Wave: “Setting the Stage:
The wave structure in Gold & Silver, along with corresponding cycles and correlations, paint an intriguing picture for precious metals in 2023 – 2024… and potentially much longer.
Gold & Silver were forecast to surge from cycle lows in Sept ‘22 (Silver) & 4Q ’22 (Gold) into late-2023 (the initial phase of a new bull market). That is expected to affirm related analysis for the 2020’s… as the latest phase of an uncanny 40-Year Cycle takes hold and ushers in dramatic changes.
There are several decisive factors that corroborate the outlook for a seismic shift to begin to take hold in 2020 – 2022, the years immediately surrounding the culmination (2021) of the most recent monetary battle in the US… and the world.
The fulfillment of momentous cycles and projected events (i.e. Disease Cycles, Stock Panic Cycles, War Cycles, Drought/Flood Cycles, etc.) in that narrow window of time add further credibility to several key outlooks for 2023 – 2025… and beyond.
One of the most convincing validations to this analysis is unfolding in the battle between paper, digital, and hard currency – particularly Gold & Silver.
2016 – 2021 was forecast to time the latest battle in an ongoing 40-Year Cycle of Currency Wars that has waged for centuries. As described in 2015 & 2016, the Dollar Index (valued by comparison to a basket of other fiat currencies) would likely disguise escalating vulnerabilities in the actual value of the Dollar… particularly when compared to Gold.
2016 – 2021 was projected to time the culmination of a 40-Year Cycle that last pinpointed the 1976 ‘global divorce decree’ from Gold, also known as the Jamaica Accord. Immediately following that breakup, gold, silver, and almost every commodity priced in US Dollars skyrocketed into 1980 (‘inflation’)… as the US Dollar plunged, on a relative basis.
The handwriting was on the wall, so to speak.
At the time (1976 – 1981), that was the latest in an ongoing ‘currency war’, which has pitted hard vs paper, and Dollar vs anti-Dollar, monetary forces dating back to the Revolutionary War and the century of colonization that preceded it.
The late-1690’s saw the Plymouth Colony experiment with paper currency. The late 1770’s saw a new nation getting financially burned by a similar foray into fiat currency with ‘The Continentals’.
Similar battles were waged in 1816 – 1821, 1856 – 1861, 1896 – 1901, 1936 – 1941 & 1976 – 1981.
This time around, in 2016 – 2021, Gold was forecast to enter a surreptitious advance (a potential precursor to something more significant to follow that move) – beginning with ‘The Golden Year’ projected for 2016…
https://www.insiidetracktrading.com/40yc-the-golden-years/
https://www.insiidetracktrading.com/wp-content/uploads/2018/07/2016-the-golden-year.pdf
Dollar Dilemma
During that period, the Dollar Index was projected to create multi-year turning points in early-2017 & early-2020 (highs) as well as early-2018 and early-2021 (lows) – the recurrence of an uncanny ~3 – 3.25-Year (36 – 41-month) Cycle that has timed Dollar Index turning points for the past 30 – 40 years.
While the Dollar Index was whipping up and down, Gold was forecast to see a major advance from late-2015 into late-2020/early-2021. So, even though the Dollar Index was trading sideways, the US Dollar was losing value against Gold throughout that entire period… setting the stage for 2021 – 2025.
That is when a related 80-Year Cycle of War was projected to re-emerge. That cycle has a monetary component as well as a military one.
The Wave Structure
Both markets adhered to those outlooks with Gold heading back to its multi-year/multi-decade high before completing that phase of a new bull market in precious metals.
Gold set a peak in Aug ‘20 (2060 – 2080/GC) – in line with multi-month and multi-year cycles – and then retraced into March ‘21. It then rallied into March ‘22 and retested – but did not close above – the Aug ‘20 peak.
That reinforced what was forecast to be a multi-year peak (2020) and spurred a second sell-off in Gold back down to, and briefly below, the March ‘21 low – leading into the time frame (4Q ‘22) when another major (multi-year) low was projected for Gold.
This wide trading range – bordered by the highs of Aug ‘20 & Mar ‘22 and the lows of Mar ‘21 & Nov ‘22 – dates back to the early-2020 peak, meltdown, and subsequent sharp rally… and the highs and lows surrounding that period.
Once Gold broke above its early-2020 peak (after plunging to 6 – 12 month support), it twice retraced to the level of that early-’20 high… resistance turned into support.
That is the same price support that Gold returned to in 4Q ‘22 and which spurred the latest surge from ~1660/GCM up to ~2040/GCM.
If Gold can make it back up to 2060 – 2080/GCM, potentially when intermediate cycles peak in early-May ‘23, it would produce another important clue for the coming years.
Of added interest/intrigue, the Date of Aggression (April 19) could provide some impetus or reinforcement to this analysis. That will be further examined in upcoming Weekly Re-Lay publications.
What would Gold reveal by fulfilling this potential?
Three of a Kind; Third Time’s the Charm?
One old trading adage that has sporadically been quoted in these publications is: ‘Double Tops Hold, Triple Tops Don’t’.
That reflects the reality that a market will often test a previous high before embarking on a larger decline… often a ’b’ wave peak. However, if it tests that high, sells off for a while, and then rallies back to and retests that high another time (the second test, creating a third consecutive high or ‘triple top’)… the market is revealing a different reality.
In those cases, a market may have traced out a ‘flat correction’ (a horizontal correction similar to Gold’s 2020 – 2022 action) in which two successive highs and two successive lows were set in close proximity to one another (see diagram on page 2). The second low is the culmination of an ‘a-b-c’ correction (decline, rally, decline) and ushers in the early stages of a new advance.
Since a market has already established a solid resistance zone – with its initial and subsequent highs (e.g. Gold in Aug ‘20 & Mar ‘22) – it will often find resistance there again (temporarily)… in the early stage of that new advance.
That creates a ‘triple top’ – three successive highs at the same level – and spurs an initial pullback.
It also creates the ‘i’ and ‘ii’ waves (‘1’ and ‘2’ waves on a smaller magnitude) of a new, developing impulse wave higher.
When the ‘ii’ wave low takes hold and the ‘iii’ wave advance begins, the market now has new momentum – from a higher plateau – with which to break through the resistance level formed by those three successive highs (see diagram above). It is the third time attempting to break above the original high and, we all know…
‘Third Time’s the Charm’.
Wave Structure Recap
In Sept & Nov ‘22, Silver & Gold completed multi-year corrective phases – ‘a-b-c’ and ‘A-B-C’ declines on two different magnitudes – and fulfilled cycle lows that came into play at that time. That ushered in what were forecast to be 1 – 2 year (or longer) bull markets in those metals.
In order to comprehend the magnitude/degree of current expectations, it is critical to understand the degree of those waves and cycles that were fulfilled with the 3Q/4Q ‘22 lows.
The charts on page 5 and the INSIIDE Track reprints on pages 7 – 9 lay out what was expected for 4Q ‘22/1Q ‘23… and why/how that would corroborate what had been published regarding 2023/2024.
The Weight
One of the factors that removed a heavy burden from Gold & Silver was the US Dollar reaching a combination of major, multi-year upside price targets in 3Q/4Q ‘22. (Even though cycles would still allow for a 2023 retest or spike above that high, the Dollar Index has fulfilled almost all of what has been projected for its 1 – 2 year and 10 – 15 year advance.)
At the time, Silver had signaled a major bottom (early-Sept ‘22), Gold was on track for a multi-year bottom in 4Q ‘22 (arrived in Nov ‘22), and cryptocurrencies were completing a major bubble-bursting plunge with Ether already signaling a 6 – 12 month bottom (June ’22; see chart on back page) and Bitcoin attacking major downside targets that were projected to usher in a 6 – 12 month low.
Various stock indexes, that often move with Bitcoin, concurred. A related issue of The Bridge – which included that Ether chart and others – explained how the US Dollar had fulfilled its Major upside targets and would not even need to enter a bear market in order to remove the weight that was burdening anti-Dollar currencies (metals & cryptos):
09-07-22 – “This Dollar Index outlook from the Feb ’21 INSIIDE Track detailed some key factors projecting a multi-year bottom in early-2021 followed by a strong wave ’5’ rally – projected to… ultimately reach or exceed 110.0/DX. With the US Dollar having just reached that major, 1 – 2 year upside price target, it is likely to trigger an initial peak and enter some consolidation.
It would NOT have to enter a major bear market and would NOT have to set its final high in order to remove some serious downside pressure that has been weighing on cryptocurrency (and Gold/Silver) for the past ~6 months.
It only needs to stop rallying and convince traders that a multi-week (or multi-month) pause is taking hold in order to remove that weight from Bitcoin (and Gold/Silver), allowing them to enter a multi-week surge.
The same is true of interest rates, which share a close correlation. (Bonds & Notes triggered a 4-Shadow signal that could lead to a multi-month bottom.) This Dollar test comes at the exact time when a multi-month bottom has been forecast for Bitcoin… a decisive cycle low that has been discussed throughout 2022.”
That is exactly what has been occurring!
The Dollar Index set its highest weekly close in mid-Oct ‘22 and then retraced to its 4th wave of lesser degree support (~101.30/DX) into Jan ‘23. That removed a psychological ‘weight’ off anti-Dollar financial instruments (metals & cryptos).
As a result, and at the same time the Dollar was correcting, Gold, Silver AND cryptocurrencies surged in an initial 3 – 6 month advance. (This inverse correlation, which occurs at specific times within Dollar and anti-Dollar trends & cycles, holds some intriguing potential for the next Dollar decline.)
This interplay – between paper, hard, and digital currency – also includes interest rates, which could have a profound impact on Gold & Silver over the next 12 – 18 months. As described in the Sept ‘22 quote, Dollar strength AND rising interest rates were suppressing the price of Gold & Silver… but were unable to force them into an all-out bear market.
Instead, Gold & Silver went through a corrective phase (illustrated on page 4) – biding their time as the Dollar completed the majority of its uptrend… and then interest rates did the same. That is why the outlook for Bonds could hold the key…
The Inflationary Delay
Since 3Q ‘20, Bonds have been forecast to plunge into 3Q ‘22 and ultimately into ~March ‘23 – the ideal trend duration for a 4-Year Cycle, like the one that has governed Bonds for several decades.
Even though the Fed could still raise rates one or more times in the coming months, the markets are already turning their focus to the potential for lower interest rates in the coming 6 – 12 months.
That would allow Bonds to decline for ~32 months (July ‘20 into March ‘23) and then rally for ~16 months (March ‘23 into July ‘24; a 50% rebound in time) – the textbook division for a cycle like this.
So what does that have to do with Gold & Silver?
INSIIDE Track has described this scenario before, involving the correlation and non-correlation between precious metals and inflation. When inflation is raging, interest rates are usually rising and that keeps a lid on Gold prices.
However, when those interest rate hikes near an end – even as underlying inflation remains in place (though pulling back from its peak), it provides the optimum scenario for advances in Gold & Silver. When, as was the case in 2022, interest rate hikes are helping to support the Dollar, their removal has a dual-bullish impact on Gold & Silver.
Gold & Silver entered this period in late-2022 and, if the outlook for Bonds is accurate, could be in a similar time frame for [reserved for subscribers]”
Gold & Silver have steadily advanced since fulfilling the 1 – 2 year outlook for lows in Sept ’22 (SI) and Nov/Dec ’22 (GC). At that time, they entered the ideal setup – based on inflationary factors (slowing), interest rates, and the Dollar (peaking) – for the onset of a very bullish 1 – 2 year period in precious metals. Platinum is signaling something similar. 2023/24 holds the potential for some abrupt surprises (in and out of the markets) for precious metals, with multiple advances projected.
The second advance was expected to begin in early-March ‘23, after metals completed ‘2’ or ‘B’ wave pullbacks (following the initial advances), and to last into early-May ’23 (May 3 – 5) when the next intermediate high is most likely. Corresponding signals projected strong rallies in March & April ’23… coinciding with the outlook for bottoming Bonds & Notes, Cryptos and other markets.
The XAU & HUI are similar and projected a multi-month low by/on March 6 – 10 – perpetuating an uncanny ~23-Week Cycle. The monthly trend projects a strong rally to new intra-year highs to follow. Gold triggered a convincing weekly buy signal on March 3, ’23 and then triggered a corroborating daily buy signal on the March 8 close… confirming the outlook for a new surge in March/April ’23.
How High Could Gold & Silver (&XAU) Reach in 2023? Is a New MAJOR Bull Market in store??
Will the Outlook for Bonds (Bottom in ~March ’23) & Interest Rates Concur?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.