Gold/Silver, XAU/HUI Concur: Early-Aug – Late-Sept ’21 Sell-off Likely.
07/10/21 Weekly Re-Lay – Gold & Silver continue to rebound from intermediate support after bottoming in line with Gold’s weekly trend pattern and the weekly 21 MACs in both metals. The coming weeks are poised to see the weekly 21 MAC turn positive as the inversely-correlated 21 MARC declines for another ~4 weeks…
Silver remains on track to set a decisive peak in early-Aug, when a web of cycles converge. Since the late-March ’21 low, Silver has had a 36-week AND an 18-week low-low-(high) Cycle Progression projecting a peak in the first half of August.
In late-May, Silver created a reinforcing 9-week low-high-(high; early-Aug) Cycle Progression. A peak in Aug ‘21 would also fulfill a ~6-month high (Aug ’20) – high (Feb ’21) – high (Aug ’21) Cycle Progression…
The XAU provided some additional clarity with the action in, and ultimate close of, the past week. It began the week by bouncing to its weekly SPR and LHR, remaining just below its weekly 21 High MARC (146.20) and peaking on the third trading day of the new month (preventing it from turning the intra-month trend up while also preventing the weekly 21 High MAC – which had turned down the previous week – from turning back up).
That made the XAU vulnerable for another quick sell-off and spike low, which took hold on Thursday. The biggest revelation occurred with it closing the week below 141.78/XAU and turning its weekly trend down, as a result. It is of utmost importance to understand the context and ramifications of this signal, so as not to misconstrue it:
— First, this is a lagging/confirming indicator that is often triggered at the culmination of a move. A downward reversal often occurs at the end of an initial sell-off.
As a result, the XAU is still likely to rally into August – when multiple weekly & monthly cycles converge. However, it is now far more likely to set a lower peak at that time.
— Second, this reversal simultaneously reveals that the XAU is only in the middle of a larger-magnitude (down) trend.
The weekly reversal signal (and corresponding, initial low – usually set within 1 – 2 weeks) typically triggers a multi-week bounce that could stretch long enough to twice neutralize the new weekly downtrend… before a secondary top takes hold.
That dovetails with cycle analysis for a rally into August and a multi-month peak at that time.
— Third, this weekly trend reversal corroborates the outside-month/2 Close Reversal lower the XAU generated in June ’21… while (paradoxically) maintaining the likelihood for a multi-week bounce after the XAU fell to its rising monthly 21 High MAC.
June’s monthly reversal lower also neutralized the monthly uptrend in the process. Both of those signals reinforce the likelihood for another decline following a rally into August.
— Fourth, this action is signaling that a ‘5th’ wave peak (5 waves from the Sept ’18 secondary low) could be intact, in sync with multi-month and multi-year cycle highs in May ’21. If so, that would portend – at the very least – an overall drop back to the March ’21 low of 128.08/XAU (since that would now be the ‘4th wave of lesser degree’ support, if a 5th wave peak is intact).
[Since that ‘5th’ wave peak could be interpreted in at least two ways – a ‘5th’ of a larger-magnitude III wave, meaning that a final ‘V’ wave rally would follow this sell-off… OR… a ‘5th’ of a major ‘C’ wave, meaning the bull market is complete – the longer-term ramifications hinge on other indicators and will be discussed separately.]
This XAU action is also in sync with the HUI, which already fulfilled its upside objectives – surging to 325.0 in May ’21 and peaking there without turning its intra-year trend up – and turned its weekly trend down while closing well below its weekly 21 Low MAC. That index has been forecast to set a lower peak in early-Aug – the next phase of its own cycle highs, including an 11-week low-high-(high) Cycle Progression.
On a monthly basis, the HUI is doing what the XAU is expected to do on a weekly basis. The HUI turned its monthly trend down in late-Feb, setting an initial low and rebounding for 2 – 3 months. It has since resumed its monthly downtrend and is expected to work lower (on balance) into Sept. ’21.
A low in late-Sept. ’21 would fulfill a 30-week low-high-high-low-(low) Cycle Progression and a larger-scale, 18-month low (Sept ’18) – low (Mar ’20) – low (Sept ’21) Cycle Progression. It would also complete a precise .618 retracement in time (~98 weeks up/~60 weeks down) while perpetuating a 3-year high (Sept ’12) – low (Sept ’15) – low (Sept ’18) – low (Sept ’21) Cycle Progression.”
Gold & Silver, the XAU & HUI are all arguing for a bearish period between early-Aug and late-Sept ’21 – before a Major bottom could take hold. Cycles portend a multi-week or multi-month peak in early-Aug followed by a sell-off into late-Sept ’21 – when weekly, monthly & yearly cycles converge and project a 3 – 6 month (or longer) bottom.
How Does This Reinforce Outlook for 4Q ’21 & 1Q ’22?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.