Gold Remains in Weekly Downtrend; Early-July Action is Pivotal.
07/02/22 Weekly Re-Lay – “Gold & Silver dropped to new lows after failing to generate any signs of a bottom…
Gold & Silver find themselves at a decisive juncture. They remain negative and have not been able to show any signs of a bottom (yet). That allowed them to spike to new lows to begin the month of July. That is where it gets interesting…
On a monthly basis, Gold has retraced to its monthly trend support and again to its Jan ’22 low – holding that intra-year trend support while also failing to close below its mid-May low. It has pulled back to its rising monthly 21 High MAC – the second-most important support (after the monthly trend support) for the monthly trend.
That also allowed Gold to invert the latest phase of its 16-week cycle, creating/fulfilling a 16-week high-high-high-(low) Cycle Progression…
The intriguing part of this is what it could mean (but ONLY if this support holds) for the next 6 – 9 months and for the next pivotal weekly/monthly cycle high (after the one anticipated in Aug/Sept ’22) – in Feb/Mar ’23. More on that later.
For now, Gold & Silver are still expected to set an important peak in Aug/Sept ‘22 – the 2-year anniversary of the Aug ’20 peak and fulfillment of a related 2-year low-high-high Cycle Progression, as well as the next phase of the ~6-month cycle in Silver that helped pinpoint the Mar ’22 high.
From a price perspective, Gold’s latest spike low is also reinforcing an evolving range-trading sequence in 2022. The Aug ’22 Gold contract began the year creating support near 1790/GCQ before rallying back to its Nov ’21 high at ~1880/ GCQ. When it finally broke out of that ~90.0/GCQ range, it accelerated up to ~1970/GCQ and then to ~2060/GCQ before peaking.
The subsequent decline took Gold back down to ~1790/GCQ in May ’22 followed by a bounce and repeated attack of 1880/GCQ. It could not close above that resistance and fell back to ~1790/GCQ…
While Gold is holding multi-month support, Silver has continued to decline and is close to testing multi-year support at 19.00 – 19.50/SI – the levels where it set a triple top in Sept ’19, Feb ’20 & June ’20 – before breaking out and accelerating higher into Aug ’20.
That is also a .618 retracement of its 2020/2021 surge…
Gold & Silver could not close above near-term resistance and project any additional upside into month-end. As a result, a quick spike lower took hold over the past two trading days. Gold did not (yet) close below its May 16 low so it remains in a ~2-month period of volatile consolidation…
The XAU & HUI showed more weakness, selling off to new lows (lowest levels since 2Q ’20) and reinforcing the significance of their April ’22 peaks – the latest phases of both ~10-month & ~5-month high-high Cycle Progressions. The ~5-month cycle comprises a very consistent 21 – 23 week series of high-high cycles that dates back to Feb ’20 and the ensuing Aug ’20 peak – 23 weeks later.
The April ’22 high was the 7th in that sequence and was 23 weeks from its Nov ’21 high, which was 23 weeks from May ’21 peak. Another peak is likely in mid-to-late-Sept ’22. In the interim, those indexes have declined for almost half the cycle. (The next phase of both cycles is also in Feb/Mar ’23.)
Platinum & Palladium are diverging but both remain well below cycle highs in early-March ‘22. Palladium is trying to bottom but needs a daily close above 2100/PAU to show new strength.
Copper continues to plunge after fulfilling a myriad of weekly & monthly cycles in early-Mar ’22 and signaling the onset of a multi-month decline. It set a secondary high in early-June and projected a new leg down, which could test ~3.500/HG.”
Gold, Silver & XAU/HUI Indexes declined into early-July after failing to signal anything more than 2 – 3 week rebounds in late-May/early-June. Multiple signals (weekly trend remaining down, daily trend & 21 MAC turning back down, intra-year trend turning neutral) are reinforcing signs of weakness and further reinforcing multi-month cycles that peaked in late-Feb/early-Mar ‘22. ~6-week & ~12-week Cycle Progressions could continue to impact price swings.
What Do Prevailing Weekly Downtrends Signify?
How Does Gold/Silver Action Reinforce March ’22 Cycle Highs??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.