Gold, Silver & XAU Cycles Bottom in Early-Oct; Project Sharp Rallies into Early-Nov ‘23.
10-04-23 – “Throughout much of 2023, Crude Oil and the Energy Complex were focused on one primary cycle – a multi-week & multi-year cycle projecting a decisive top for mid-Sept ’23. That cycle was discussed repeatedly, particularly once Crude signaled a multi-month low in early-May ’23 and then reinforced it in mid-June ’23.
From that point forward, Crude was forecast to rally into Sept 11 – 15, ’23 with the (published) potential to retest its June ’22 high – reaching 92.00 and possibly 96.00/CL before a multi-month top was most likely. Not only would that fulfill 3 – 6 month & 6 – 12 month cycle outlooks, but also 2 – 3 year ones.
That dovetailed with related cycles and targets in the S+P Goldman Sachs Commodity Index (GSCI or GNX), a gauge of broader commodity inflation. Not surprisingly, the GSCI had weekly & monthly cycles converging on Sept 11 – 15, ’23 and projecting a multi-month peak – ideally near 622/GNX.
Since its early-June ’22 peak, the GSCI had set successive highs on a 22-week interval, creating a ~22-week high-high-high-(high; Sept 11 – 15) Cycle Progression that projected a peak in mid-Sept ’23 – the same time Crude cycles were projecting a peak.
In doing so, it matched the duration of its previous Dec ’21 – Mar ’22 surge while rebounding 50% of its Nov ’22 – June ’23 decline. It was not just the timing features of that recent peak, however, that made it noteworthy. Price features were revealing critical clues…
For starters, the GSCI rebounded less than a third of what it lost from its 2022 peak to its June 2023 low. That is not a sign of runaway commodity inflation.
Second, it peaked at the level of its Jan ’23 high – its year-opening range and the primary resistance for its intra-year trend (down turned neutral). That intra-year action is also not overly inflationary.
Third, it peaked precisely at its multi-month upside range-trading target of 622/GNX.
Fourth, and this one is price AND time, it peaked in the second month after attacking and holding its monthly LHR. A test of that indicator normally leads to a 3 – 6 month peak in the ensuing 2 – 3 months.
While this does NOT signal an automatic shift from inflation to deflation, it DOES show that a crucial level of upside inflationary pressure is diminishing.
Not only did that coincide with projections for a major shift in energy prices, it also dovetailed with analysis for a divergent stock index peak on Sept 14/15, followed by another (deflationary) sell-off…
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.]…
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.
[That early-May ’23 high projected a future peak for early-Nov ’23 but the cycle setup and wave structure concluded the majority of any future rally – leading into early-Nov ’23 – would occur in the final weeks just before that cycle peak. That remains the case.]
Ideally, that corrective wave would drop back to – and bottom near – the 4th wave of lesser degree support… 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. While these types of waves do not normally mimic each other, the 2016 action provides an example of how these initial waves can unfold…
As a result, the ultimate wave ‘II’ low could come now but the weekly trends would need to ultimately validate that. A multi-week rally during the final weeks leading into an early-Nov ’23 cycle high is still possible…
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.
Cycles that had projected a multi-week low in mid-Aug ’23 could not elevate to a higher magnitude bottom and these indexes eventually violated those lows.
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 are entering bullish cycles that begin in early-Oct ‘23… and are expected to spur a sharp multi-week rally into early-Nov ’23. Middle East Cycles collide in Oct ’23 and also in 2024, potentially reinforcing this outlook. The US Dollar could ultimately suffer.
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) early-Nov ’23 peak. The weekly 21 MARCs concur.
Where are Metals Likely to Rally in 4Q ’23? Will Middle East War Cycles Have an Impact??
How Does 90/10 Rule of Cycles Project Sharp Rally in October ’23?
Why are early-Nov ’23 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.