Gold, Silver & XAU Signal September Sell-off & Projected Drop to 1460 – 1470/GC; What Then???
09/11/19 Weekly Re-Lay Alert – GC/SI/XAU and the Web of Cycles – II: “The past two weeks have powerfully validated the unique convergence of cycles that reached fruition in late-Aug. ’19. That included equity prices (an August sell-off and late-August low were forecast, validating daily & weekly cycle lows on Aug. 26/27) completing a corrective phase as interest rate futures accelerated into a potential multi-month peak.
Precious metals were similar, surging into late-Aug. (some carried over with spike highs in the opening days of September) and fulfilling a myriad of cycles.
In the case of Gold, the peak set on Aug. 26/Sept. 4 (double top) adds another powerful cyclic force that validates the focus on ~March 2020 for the next multi-month peak. That is the next phase of the 27 – 29 Week Cycle as well as the ubiquitous 55 – 59 Week Cycle (that has governed Gold since its 2011 peak).
With respect to its intervening 13 – 14 Week Cycle – all of which also helped pinpoint the Feb. 19 – 22, ’19 cycle peak – the action of the past two weeks also projects some focus to [reserved for subscribers] for a subsequent peak. The weekly trend should help determine if that will more likely be a higher high or a lower high.
Corroborating this, the XAU perpetuated daily cycles, peaking in early-Aug. (Aug. 6 – 9), pulling back into Aug. 19 – 23 – when another intermediate low was expected in sync with a recurring ~90-degree cycle – and then rallying into Aug. 28, the ensuing phase of the same 18 – 21 day low-low-low-high-high-(high) Cycle Progression that timed the early-Aug. peak.
So, even short-term daily cycles began to line up as a plethora of weekly cycles was coming to fruition.
Looking ahead for just a moment, ~March 2020 has an added multiple joining the equation – a ~112-Week Cycle – the 2x multiple of the 55 – 59-Week Cycle. For those that weren’t around in Jan. ’18 & Feb. ’19 – the last two times the 55 – 59 Week Cycle proved its uncanny prescience – a quick review should be beneficial…
All of these cycles are higher-multiple variations of the 7-Week & 14-Week Cycles described repeatedly in 2019. As explained back in Jan. & Feb. ’19, these related cycles often recur at significant turning points.
In its most basic form, this is a web of cycles that includes 7, 14, ~28, ~56 & ~112-Week Cycles – all multiples of a 7- and 14-Week Cycle.
The ~112-Week Cycle timed the two major phases of the descent from Sept. 2011 into Dec. 2015, creating a related high-high-low Cycle Progression that encompassed a total of 222 weeks (just 2 weeks shy of two 112-week cycles).
If the subsequent advance lasts the same duration (222 weeks), it would peak in ~March 2020 (a cycle that has already been discussed in several contexts).
Gold subsequently rallied from Dec. ’15 into Jan. ’18, a precise 112-week rally. 112 weeks in the future – a 112-week low-high-(high) Cycle Progression – portends a future peak in ~March 2020.
Even if this overall advance lasts longer than that, which is the current expectation, March 2020 would be a textbook time for a multi-month peak to take hold and make some traders think the bull market is complete (similar to what was projected for late-Feb. ’19 and then for 3Q ’19).
There is also the chance that March 2020 could set a 3 – 6 month peak that is only retested in late-2020/early-2021 (when XAU cycles pinpoint the ideal time for a multi-year peak). That is where price action needs to be the final arbiter, honing what to expect from cycles.
That 112-Week Cycle broke down into a ~56-Week Cycle (with the timing of successive turning points ranging from 54 – 59 weeks in duration) that helped pinpoint a multi-month peak in late-Feb. ’19 – projecting future focus to March/April ’20 and to the midpoint (27 – 29 weeks) in late-Aug./early-Sept. ‘19.
That 54 – 59 Week Cycle timed a series of lows in 4Q ’13, 4Q ’14, 4Q ’15 & 4Q ’16 – at intervals averaging 56 weeks each – and then projected future turning points for late-Jan. ’18, late-Feb./early-March ’19 & March/April 2020 (see HCP diagram above).
Here again, it projects important focus on that future cycle in ~March 2020.
That ~56-Week Cycle broke down into successive ~28-Week Cycles (27 – 29 weeks) including the decline from Jan. ‘18 into Aug. ’18 (29 weeks), the ensuing rally from Aug. ’18 into Feb. ’19 (27 weeks) and the high – high cycle (potential) for late-Aug./early-Sept. ‘19 (27 – 29 weeks from late-Feb. ’19 peak).
That is why if the latest peak – the midpoint of the latest ~56-Week Cycle from late-Feb. ’19 into March/April ’20 – can hold for at least 2 – 4 weeks and ideally much longer, it would powerfully corroborate that ~March 2020 cycle.
The Sept. 4 spike high also perpetuated a ~2-month/~60-degree low (March 5) – low (May 2) – low (July 1) – high (Sept. 3/4) Cycle Progression. (More on Gold in the section on precious metals.)
Gold & Silver have sold off sharply after surging into the latest phase of an extremely unique combination of weekly cycles. They peaked just as the Gold/Silver ratio spiked to multi-month lows – below levels last seen in Oct. ’18 & Jan. ’19 (~82/1). That spike – back to 6 – 12 month support – increased suspicions that metals were reaching an extreme and poised for a setback.
As explained recently, this latest Gold peak provides the opportunity for the onset of a subsequent correction of one higher magnitude than the most recent one. So, instead of (roughly) equating to the magnitude of its June – Aug. consolidation, the next correction could be more like the late-Feb. – late-April correction (or potentially larger). The timing is likely to be shorter.
If that is the case, it would have Gold declining to (at least) 1460 – 1470/GCZ.
Gold quickly validated its cycle highs, triggering a weekly Double-Key AND outside-week/2 Close Reversal lower while dropping right to its weekly HLS (1510.9/GCZ). That projected a 2 – 3 week sell-off while also signaling that an intermediate low could be seen by late-Sept.
The XAU confirmed its Aug. 28 peak and is expected to decline into Sept. 23 – Oct. 4 – perpetuating an 18 – 19 week low-low-low-(low) Cycle Progression.
A drop to at least 86.00 – 86.80/XAU is likely, and potentially back to 80.25 – 80.80/XAU. This comes after the XAU surged right to its range-trading target near 100.60/XAU (~60.60 – ~80.60 – ~100.60)…
1 – 4 week traders can [reserved for subscribers]”
Precious metals peak in line with uncanny web of weekly cycles in Gold. A multi-month peak in late-Aug./early-Sept. fulfilled a myriad of upside objectives… and reinforces cycles converging in March 2020! Sharp sell-off into late-Sept. projected, with Gold targeted for intermediate drop to 1460 – 1470/GC.
What Should Follow September Sell-off?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.