Gold, Silver, XAU & HUI Poised for Major Bottom!
09/29/21 Weekly Re-Lay Alert – “Metals & Miners Merging”
Much in the way the DJTA has led a corrective period in the overall equity market, the Gold Bugs Index (HUI) has led a corrective period in precious metals and mining shares since Aug ‘20. That was highlighted early this year, after the HUI had turned its monthly trend down and confirmed a 1 – 2 year topping phase.
It was then projected to rally to ~325.0/HUI, leading into multi-year cycle highs in May ’21. At that time, the XAU diverged and set a slightly higher high (fulfilling those cycle highs) while the HUI remained in sync with its monthly & intra-year downtrends and set a lower high. Its leadership role was reiterated in mid-2021 when the XAU turned negative:
6-19-21 – “The XAU closed below 157.64 on June 15, turning its intermediate trend down, removing any remaining potential for a final spike high, and ushering in the time for a larger-magnitude decline in line with weekly & monthly cycles. It also fulfilled its outside-week/2 Close Reversal lower of June 4.
That corroborated what the HUI has been showing since mid-May when it fulfilled its outlook for a surge from ~250.0 (Mar ’21 low) into 325.0 – briefly spiking to a new intra-year high (but NOT turning its intra-year trend up). That index has been leading this topping and transition phase. In early-June, the HUI confirmed an intermediate reversal lower…”
That ushered in the second phase of an overall ~year-long corrective period, stemming from the Aug. ’20 peak. Since that corrective period – at least on a 6 – 12 month basis – is now (likely) nearing fruition, it is a pivotal time to review this outlook and what it might mean for the coming months.
From the broadest perspective, there is a consistent ~3-Year Cycle in the HUI that timed the secondary high in Sept. 2012 followed by the culmination of the ensuing plunge in Sept. 2015. That multi-year low triggered an initial advance and then a prolonged correction into Sept. 2018 – the next phase of that ~3-Year Cycle. The subsequent phase – when another higher low was/is expected is in Sept. 2021… now!
[Since an intra-month low or a monthly close low could fulfill a cycle of this magnitude and duration, that would allow for a spike low in Oct. ’21. That is why more specific cycles are needed to hone that long-term one.]
That ~3-Year Cycle has broken down and timed lows at 18-month intervals (with the March ’17 low timing an intervening low that was not closed below until Feb ’18) – creating lows in Sept ’15, Mar ’17, Sept ’18 & Mar ’20 while projecting a subsequent low for late-Sept ’21.
Throughout 2021, the HUI has corroborated these longer-term cycles, first turning its monthly trend down in Feb. ’21 – a lagging/confirming indicator that reinforced the Aug. ’20 peak and portended a 2 – 3 month bounce followed by a ‘C’ wave decline into late-Sept. ’21. To place that in proper perspective, a few previous quotes are helpful to create context:
7-03-21 – “The HUI is a little different and could be revealing important clues pertaining to the expected early-Aug. peak and some divergence that is becoming more likely for that cycle peak.
The HUI fulfilled its upside objectives – surging to 325.0 and peaking there without turning its intra-year trend up. It has since plummeted and turned its weekly trend down while closing well below its weekly 21 Low MAC.
Most likely, that will lead to a rebound into a lower peak in early-Aug – the next phase of its own cycle highs, including an 11-week low-high-(high) Cycle Progression.”
7-10-21 – “The XAU provided some additional clarity with the action in, and ultimate close of, the past week… 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… 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…
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.”
While both indexes were setting lower highs in early-Aug – and entering the bearish period of Aug/Sept ’21 – the XAU was perpetuating its own intermediate (~2-month) cycle and portending a multi-week drop.
Due to the positioning of the latest highs, and corroborating cycles in late-Sept./early-Oct., that cycle was/is likely to invert and time a low on Oct 1 – 8, ’21. That would be the next phase of a ~9-week low (Sept ’20) – low (Nov ’20) – low (Jan ’21) – low (Mar ’21) – high (May ’21) – high (Aug ’21) – low (Oct 1 – 8, ‘21) Cycle Sequence.
Meanwhile, the XAU is nearing the convergence of 3 – 6 month, 6 – 12 month & 1 – 2 year support at 110 – 115.0. A 50% retracement – of its entire 2020/2021 rally – would have the XAU dropping to 114.90. That is very close to the Sept. ‘21 HLS – a monthly extreme downside target – at 114.01. And both of them are just slightly above the Feb ’20 peak – a critical level of resistance turned into support – at 113.73…
Gold & Silver are fulfilling intermediate analysis for overall declines into late-Sept/early-Oct with Gold testing weekly support as Silver spikes below that – leading into the convergence of monthly & weekly cycle lows. Sept 30 is 180 degrees (6 months) from the Mar 30/31 lows in metals and mining shares and an ideal time – from a geometric perspective – for a low.
Silver is nearing ~21.00/SIZ, where it would complete a 50% retracement of its Mar – Aug ’20 advance from ~12.00 to ~30.00/SI. As discussed this past weekend, a low in late-Sept/early-Oct would likely lead to [reserved for subscribers]”
Gold & Silver have fulfilled analysis for another sell-off into late-Sept when weekly, monthly & yearly cycles bottom in the XAU & HUI. Silver concurs and a 3 – 6 month (or longer) bottom at this time would fulfill multiple cycles and likely set the low of a ‘c’ wave decline… ushering in the time for a new rally into 1Q ’22.
The XAU fulfilled major cycle highs in Aug ’20 and May ’21 and is fulfilling projections for a drop toward ~115.00/XAU as part of this initial decline. That is where a 3 – 6 month (or longer) bottom is most likely.
Why is Gold Projecting Subsequent High for Mid-Nov ’21?
What does this mean for the next multi-month cycle high in ~Feb. ’22??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.