Gold & Silver Fulfilling 2016 Outlook
Gold & Silver Fulfilling 2016 Outlook;
Late-2016 Low To Usher in Bull Market.
2017 – 2018 = Golden Years!
11/30/16 INSIIDE Track: Outlook 2017
Action/Reaction II
11-30-16 – 2016/2017 is the expected turning point during one of the most cyclically significant (synergistic) periods in modern history. That cycle convergence incorporates market events, natural, climatic & geophysical extremes, geopolitical cycles and the acceleration of socio-economic upheaval cycles.
From a market perspective, key cycles began their shift in late-2014–late-2015 (Stock Indices, Gold & Silver, some commodities, etc.) while others culminated in 2016 (Bonds/Notes/Interest Rates, other commodities). That ushers in 2017 – when the greatest synergy of these begin to turn dramatically. That is reflected in many ways…
In the case of Gold & Silver – as well as Grains – they have been projected to enter their ’3’ waves, a more dynamic & accelerated advance, in 2017–2018…
In the case of the Dollar, it has been projected to rally from 2013–2016/2017 – even as fundamental events are chipping away at its underpinning. That all begins to shift in 2017.
And, similar to so many major turning points in the past, the Dollar Index was/is expected to diverge from Gold & Silver, attaining its extreme peak… at a different time than when Gold & Silver set their extreme lows (4Q 2015).
[A glaring example of this pattern was in 2008, when the Dollar Index hit its extreme low, and 2011 – when Gold & Silver set their extreme peaks… 3 years apart! Another occurred in 1999, when Gold set its Major bottom after a 19-year decline. The Dollar did not peak, conversely, until 2001.]
2016/2017 also marks the collision of multi-decade & multi-century geopolitical cycles in Russia, China & the Middle East. Europe is also implicated in that shift, as it is expected to intensify struggles that are projected to lead to a revamped European Union in 2018–2021.
And, 2016/2017 is when geophysical cycles have been projected to enter another period of intensification (leading into 2019 – when MAJOR cycles collide). Even solar cycles (sunspots & solar storms) as well as climate extreme cycles corroborate.
Ultimately, these lead into War Cycles in 2021.
The Gamechanger
While any of the aforementioned shifts could trigger a domino-effect of unintended consequences, I am most acutely watching interest rates. Investors, politicians & central bankers have been lulled into a sense of complacency from a decade or more of extreme monetary easing, resulting in massive debt & negative interest rates.
When the ‘bell’ finally rings, announcing the end of that ‘period’, a mixture of panic (’over-reaction’), confusion & chaos is likely to ensue. What is probably being underestimated is the disproportional impact a small shift in this paradigm will have. And, if commodity inflation is coming back to life – at roughly the same time – it would create an exponentially-greater effect on everything linked to interest rates.
The inset on page 4 briefly addressed two compounding cycles – the Decennial Panic Cycle & the ~8-Year Bubble & Burst Cycle – that are expected to amplify the effects of (or be a direct result of) a shift in the never-ending cycle of lower interest rates & eternal quantitative easing… in 2017/2018.
To paraphrase the writer of Proverbs, ‘there is a way that seems right to man (and to central bankers & politicians), but in the end it leads to debt… and destruction… and death (similar root words)’.
Perhaps a modern word will convey this principle more convincingly – mortgage. ’Mort’ (death) ’gage’ (pledge) is the ultimate form of debt in our society… literally a ’death pledge’ in Latin. [Debt & death are often interchangeable in etymology.]
2017 – The Reaction Begins
As conveyed for several years, I expected one phase of activity (the action) in 2013–2017 and another (the reaction) – in 2017–2021. 2017 is the pivotal transition year when the reaction should begin. And, as again emphasized last month, market & geopolitical reactions tend to be overdone – rarely a proportional response to the initial act or event.
2017 times the simultaneous culmination of one phase of cycles… and the onset of another. It is also the year when the greatest synergy of cycles will be heading the same direction. Up until now, some of the key long-term cycles were still pointing up (or, in the case of interest rates, pointing down) – even as others had already peaked and begun to turn down. Stock Indices have been a perfect example of this…
11/30/16 – Gold & Silver are fulfilling the second 3–6 month phase of expectations for 2016, when the onset – or early stages – of a multi-year advance was/is anticipated, linked to a myriad of weekly, monthly, yearly & multi-decade cycles.
Those multi-year cycles include a 17-Year Cycle from 1999 – the first surge in Gold’s prior (~12-year) bull market – & a 40-Year Cycle from the onset of one of Gold’s most prolific & parabolic advances higher that began in 1976. Just as 1976 & 1999 were only the beginning of multi-year advances in Gold, I have expected 2016 to be the same – a start.
For Gold to validate that, it needed to surge into mid-2016 before subsequently pulling back into 4Q 2016. On an annual basis, the months of November & December have timed each of the past 3 – and 4 of the last 5 – lows. That has created a ~360-degree low-low-low-low Cycle Progression targeted on Nov./Dec. 2016 for a bottom.
Even before Gold & Silver embarked on their initial ~6-month surges, Nov./Dec. 2016 has been the focus for a secondary low, discussed in analysis since late-2015. That time frame has now arrived and Gold & Silver are expected to set important lows before the end of 2016.
Ideally (based on the greatest synergy of related weekly & monthly cycles), that low would have taken hold in Nov. 2016 – the latest phase of Silver’s ~11-month high-high-low-(low) Cycle Progression. Silver may have fulfilled that – bottoming on Nov. 23/25th (3–4 trading days after the greatest synergy of daily & weekly cycles on Nov. 18th).
Gold, however, has extended its drop into the 1-year anniversary (360-degree cycle) of its 2015 continuous-contract bottom – on Nov. 30–Dec. 4, 2016. That 360-degree cycle has been divided by, rather appropriately, the Golden Ratio – including a ~32-week rally followed by a ~20-week decline (a .618 retracement in time).
Ironically (adding to the volatility of the past month), early-Nov. 2016 was the latest phase of an opposing ~4-month cycle in Gold that has been in place – and discussed – since 2014. It created highs in March & July 2014, followed by lows in Nov. ‘14 and March, July & Nov. ‘15.
That Cycle Progression then shifted to highs, set in early-March & early-July 2016 – projecting ensuing highs for early-Nov. ‘16 & early-March 2017 (see excerpt from Aug. ’16 INSIIDE Track on previous page). Gold spiked up into early-Nov. – rebounding .618 of its decline – and then reversed lower. That cycle only needs to hold for 1–2 months and trigger a 2–3 week decline (as it did in March ‘16) to be valid, so it does not reduce the potential for a monthly cycle low at this time.
Gold has now retraced .618 of its 2016 advance (in price as well as time), placing it at a decisive juncture… just as Silver is approaching its ~16.000/SI downside target. That adds to the potential for a multi-month/multi-quarter bottom before year-end.
6–12 month & 1–2 year traders & investors could have entered partial long positions in Gold & Silver in late-July/early-August ’15 and then added longs in early-Jan. ’16. 25% of those positions should have been exited in early-August, w/gains. Another 25% of Gold longs should have been exited last week, as well.
Hold the remaining 50–75% and [reserved for subscribers].
The XAU has dropped sharply since fulfilling its 2016 upside potential while attacking 1–2 year resistance and its monthly LLH objective – at 105–117.62. It was expected to set a rebound peak in early-Nov. – the latest phase of a 42-day/6-week high-high-(high) Cycle Progression (~Nov. 3rd) – before resuming its correction. That has been fulfilled.
The XAU has been focused on (only) Dec. 2016 for a final pullback low – the latest phase of an ~11-month low-low cycle & a .618 retracement in time (29 weeks up/18 weeks down). The 6-week Cycle Progression corroborates that. Depending on price action, there is a chance this decline could stretch into mid-January and create a 1-year/360-degree high (Jan. ’15)–low (Jan. ’16)–low (Jan. ’17) Cycle Progression.”
Gold, Silver & Gold Stocks are fulfilling the potential for a steep decline from July/August 2016 into Nov./Dec. 2016 – when a secondary bottom is expected. That should lead into 2017, when the next phase of a developing bull market is expected to take hold. Gold is poised to set a series of ascending lows (late-2015, late-2016, mid-2017) as it prepares for a more convincing advance – expected to take hold in 3Q 2017. More on this in the next issue.
Also, see 40-Year Cycle: Golden Years & 2016 – The Golden Year Reports for details on outlook for late-2016 into 2018 (and beyond).