Gold, Silver & XAU Fulfill Early-Oct Cycle Lows; Project Sharp 2 – 4 Week Rallies.
10-05-23 – “Gold & Silver Gold & Silver remain in multi-month corrective phases from their multi-month cycle highs on May 3 – 5. They added another leg to the overall wave ‘II’ retracement of the Sept/Oct ’22 – early-May ’23 rally.
[That ~8-month rally was a 5-wave advance, likely representing the first primary rally (wave ‘I’ of ‘V’) of a developing larger-magnitude multi-year advance.]
In most cases, wave ‘II’s retrace somewhere between 50% and .786 – more commonly .618 – .786. In the case of Gold, it retraced more than .618 on a contract basis (1870/GCZ) and could drop as low as a .786 retracement (1800/GCZ).
Since Gold & Silver added an additional sell-off… it is a good time to review the bigger-picture outlook to see if and how recent action fits into it and/or where it has altered any outlook…
For starters, Gold & Silver were projected to set multi-year lows in late-2022 and embark on a new (likely multi-year) advance.
If the 7-Year Cycle has anything to say about it, that advance should last at least 3.5 years (half of the 7-Year Cycle), would likely last ~56 months (2/3 of the 7-Year Cycle), and could last the entire 7-year period since it is due for an inversion.
Similar to 2016 (right after the previous phase of the 7-Year Cycle bottomed), Gold & Silver were expected to undergo an initial 6 – 12 month advance with Gold targeting a surge to 2060 – 2080 (its Aug ’20 & Mar ’22 highs; its all-time highs) as Silver should rally to 26.00 – 26.50/SI.
If fulfilled, that would likely complete the wave ‘I’ of a multi-year advance.
They reached those targets in early-May ’23, completing 7 – 8-month, wave ‘I’ advances that paved the way for a wave ‘II’ decline to take hold. Those peaks also fulfilled a collection of weekly & monthly cycle highs, reinforcing that a 3 – 6 month peak was unfolding.
Ideally, that corrective wave would drop back to – and bottom near – the 4th wave of lesser degree support, which was created at the early-March ’23 lows. Gold created that support at 1880 on a Dec ’23 contract basis but at ~1808/GC on a continuous-contract basis.
Silver’s 4th wave of lesser degree support is at 20.61/SIZ & 19.83/SI. The big question was/is when the ultimate wave ‘II’ lows would be set.
(During the prior phase of the 7-Year Cycle, Gold initially rallied for 7 months and then declined for 5 months – into its wave ‘II’ low… similar to what is unfolding now. While these types of waves do not normally mimic each other, the 2016 action provides an example of how these initial waves can unfold.)
Those downside targets are not bound by time so the first potential time for a wave ‘2’/’II’ low was when weekly cycles bottomed in mid/late-Aug ’23. Gold & Silver fulfilled those cycle lows – but did not reach their 4th wave lows – and Silver quickly shot higher. It twice neutralized its weekly downtrend, during that rally, but could not turn that weekly trend up and elevate the rally to something larger than a 2 – 4 week advance.
When they violated their Aug ’23 lows, Gold & Silver accelerated the drops toward their 4th wave of lesser degree support. As a result, the ultimate wave ‘II’ low could come now but the weekly trends would need to ultimately validate that.
For now, Gold & Silver need daily closes above 1864.7/GCZ & 22.41/SIZ to turn their new intra-month trends up and give the first sign that a bottom is forming…
The XAU & HUI also showed additional weakness after rebounding to the weekly LHR (119.27/XAU) on Sept 15 and reversing lower after testing the declining weekly 21 Low MAC…
They remain in corrective phases that have been in effect since their mid-April & early-May ’23 highs and which also appear to be ‘II’ waves of a larger, developing wave structure on a multi-year basis.
A low in the first half of Oct ‘23 would fulfill similar-magnitude AND duration declines (‘c = a’ on a price & time basis) – potentially completing those wave ‘II’ declines.
There is also a larger-magnitude monthly cycle that has been discussed throughout the past 5 – 7 years (particularly in Gold). It could impact all the metals’ markets at this time…
This is a 12.5 – 13.5-month/~54 – 59-week cycle that has recently created a high (Aug ‘19) – high (Aug ‘20) – low (Aug/Sept ‘21) – low (Sept ‘22) Cycle Progression that portends another low in the first half of Oct ‘23.
On a short-term basis, the XAU & HUI need daily closes above 105.84/XAU & 206.79/HUI to turn their new intra-month trends up and signal (at least) multi-week lows are in place.”
Gold & Silver (and XAU/HUI) are entering bullish cycles that begin in early-Oct ‘23… and are expected to spur a sharp multi-week rally into mid-Oct (Silver) and potentially early-Nov ’23 (Gold). Middle East Cycles collide in Oct ’23 and also in 2024, potentially reinforcing this outlook.
The action since late-2022 is powerfully validating the onset of a new 40-Year Cycle of Currency War in which Gold & Silver possess unique potential for late-2023 – late-2024! The 90/10 Rule of Cycles in Gold continues to project a sharp advance in October ’23 – in the final weeks leading into a (potential) Oct/Nov ’23 peak. The weekly 21 MARCs concur.
Where are Metals Likely to Rally? Will Middle East War Cycles Have an Impact??
How Does 90/10 Rule of Cycles Project Sharp Rally in October ’23?
Why are mid-Oct (Silver) & early-Nov ’23 (Gold) Cycle Highs the Key to 2024 Outlook?
Refer to the April 11, 2023 special issue of The Bridge – Gold, Silver and Elliott Wave Structure – and subsequent reports – for expanded analysis and charts.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.