Gold/Silver/XAU Initially Fulfill 90/10 Rule & Unfolding Cycle Highs!
10-18-23 – “The 90/10 Rule of Cycles – an offshoot or derivative of Pareto’s Principle (80/20 Rule) – has been described many times over the past couple decades, usually cited when a combination of key weekly & monthly cycles along with weekly & monthly technical indicators identify two critical probabilities:
- A future multi-month cycle high or low.
- The likelihood for the corresponding market to consolidate for the majority of the intervening time… and then accelerate into that cycle high or low.
In short, ~90% of the magnitude of the corresponding price move is likely to occur in the final ~10% of the cycle… right before it culminates.
While this is not a precise description (90% and 10%), that might even invoke a little hyperbole, it is intended to identify when the synergy of multiple factors has identified a market and its corresponding (future) cycle when a ~parabolic rally (or sell-off) is likely to occur.
A perfect example occurred in Gold & Silver in early-2022. After they had bottomed in March & Sept ’21, the cyclic focus was on late-Feb/early-March ’22 for a future multi-month cycle peak.
The wave structure, setup of weekly & monthly 21 MARCs, weekly & monthly trend patterns, and corroborating indicators were showing that it should be ‘slow going’ for the majority of that cycle with the largest and most accelerated portion (higher) occurring at the tail end of that cycle – as Gold & Silver neared late-Feb/early-March ’22.
Similar to a current example, that example was initially identified months in advance… and market action steadily reinforced that outlook as late-2021 & early-2022 unfolded. Then came the Russian invasion of Ukraine and Gold/Silver accelerated higher for ~4 weeks (about 10% of the overall cycle) and experienced the majority of their upside price gains.
Something very similar has been projected, since May ’23, for Gold & Silver cycles that portend a multi-month peak in late-Oct/early-Nov ’23.
- Monthly & weekly cycles projected ‘the majority of Gold & Silver’s next advance’ (following its March – May ’23 advance) to take place during the final weeks of the cycle… mainly during the month of October ’23.
- A Cycle Progression of accelerated moves (Mid-July ’20 – Late-Feb ’22 – Early-Oct ’23 = equidistant ~19.25-month intervals between accelerated rallies… related to the ~19-month & ~9.5-month cycles that have been repeatedly cited in this overall analysis) identified early-Oct ’23 as the ideal time for a sharp surge to begin.
- Monthly 21 MARCs identified the month of October ’23 as the ideal time for Gold & Silver to experience an accelerated rally (‘the majority of Gold & Silver’s next advance’) to occur during the final weeks leading into a projected late-Oct/early-Nov ’23 cycle peak.
- Later on, in July & August ’23, weekly 21 MARCs identified the final weeks leading into a projected late-Oct/early-Nov ’23 cycle peak (~month of October ’23; final ~10% of the cycle from early-May into early-Nov ‘23) as the ideal time for Gold & Silver to experience an accelerated rally (majority of Gold & Silver’s second 2023 advance).
That has been the focus since late-May ’23 when the June ’23 INSIIDE Track explained why the majority (~90%) of a future advance – leading into early-Nov ’23 – would likely occur at the end of the cycle…
5-31-23 – “Gold & Silver peaked in perfect sync with cycle highs on May 3 – 5. Ever since Gold’s buy signals on March 5 & March 8, Gold & Silver were forecast to surge into early-May ’23 and fulfill a ~4-month low-high-(high) Cycle Progression in Silver and ~3-month low-high-(high) Cycle Progression in Gold.
Both reached upside price targets (2060 – 2080/GC & 26.50/SI), reinforcing those timing targets… Reinforcing that, Silver reached its downside targets while testing its weekly 21 Low MAC (22.99/SIN), finishing last week right at its monthly HLS (23.36/SIN), and turning its weekly trend down in the process.
That lagging/confirming indicator usually times an initial low (right around time of reversal) and triggers a multi-week bounce, while foreshadowing a future sell-off after that bounce. More than anything it shows that Silver could be in for a couple months of congestion… with an intervening high likely in early-July ‘23.
The early-May ‘23 peak reinforced the intra-year outlook, including ongoing analysis for another rally in 3Q or 4Q ‘23 – leading to an intra-year peak into late-Oct/early-Nov ‘23, the latest phase of a consistent ~9.5-month cycle that timed the March ‘22 peak and then the early-Jan ‘23 peak…
As is often the case, a large part of the next advance could occur toward the end of that cycle… a rally into, and peak in, late-Oct/early-Nov ’23.” [End 5/31/23 excerpt]
That has continued to be the case with weekly cycles and weekly 21 MARCs projecting an initial rally in late-Aug ’23 (leading into a multi-week high in early-Sept) and then a much larger rally in October ’23 – during the final 3 – 4 weeks (of ~26-week & ~40-week cycles).
Other factors ultimately corroborated that outlook and ushered in a very bullish time for Gold & Silver – following cycle lows in early-Oct ’23.
Gold & Silver are rallying, initially fulfilling ongoing analysis (since May ’23) that the majority of a future rally – into cycle highs in late-Oct/early-Nov ’23 – would occur at the end of that cycle.
As explained throughout the past ~5 months, that was due to a myriad of cycles, wave expectations & price indicators (i.e. weekly 21 MARC) – as well as the 90/10 Rule of Cycles which was more likely to apply during this phase – most of which would not turn positive until late-Sept or early-Oct ’23.
At the same time, Gold & Silver are further paralleling the action of 2016 (when the previous wave ‘I’ & ‘II’ of a larger-magnitude advance unfolded… similar to what is perceived to be occurring now).
In 2016, Gold & Silver rallied for 7 – 8 months before selling off for the ensuing ~5 months.
In 2022/2023, Gold & Silver rallied for 7 – 8 months before selling off for the ensuing ~5 months.
In 2016, Gold retraced 70 – 75% of its initial rally during that ~5-month sell-off.
In 2023, Gold retraced 70 – 75% of its initial rally during this ~5-month sell-off.
They dropped to ‘normal’ retracement levels with the GLD ETF dropping right to its 4th wave of lesser degree support (168.19; early-Oct ‘23 low was 168.30/GLD) as Gold & Silver neared or spiked below related levels. From a timing perspective, that set the stage for a multi-month (or longer) low in early-Oct ‘23…
The Oct 2 – 6, ’23 low in Silver completed a .618 retracement in time – 35 weeks up & 22 weeks down – while fulfilling an ~11-week high-high-(low) Cycle Progression AND a ~15-week low-low-low-(low) Cycle Progression. That was the same time of year Gold set its lowest weekly close in 2022 – a 1-year/ ~360-degree cycle from its ~Oct ’22 major bottom.
The action since then has reinforced the potential for Gold & Silver to undergo a quick, sharp 3 – 4-week rally into late-Oct/early-Nov ’23 – when a 1 – 2 month high is more likely.
On a broader basis, Gold & Silver were projected to set multi-year lows in late-2022 and embark on a new (likely multi-year) advance. If recent lows are confirmed, it would powerfully corroborate that multi-year outlook.
All of this is setting the stage for 2024, when the next big advance in metals is likely to follow a secondary top in the US Dollar…
The XAU & HUI set lows in early-Oct ’23, fulfilling similar-magnitude AND duration declines (‘c = a’ on a price & time basis) – potentially completing their wave ‘II’ declines and setting the stage for a more significant advance to begin taking hold. They (and Gold & Silver) also fulfilled a larger-magnitude 12.5 – 13.5-month/~54 – 59-week cycle that has created a high (Aug ‘19) – high (Aug ‘20) – low (Aug/Sept ‘21) – low (Sept ‘22) – (low; Oct ’23) Cycle Progression.
They are attacking their late-Aug/early-Sept highs and need weekly closes above 116.00/XAU & 224.50/HUI to elevate these advances to the next higher magnitude and spur additional upside.
The XAU has a pair of related Cycle Progressions (28-week low-high-(high) & 14-week high-high-(high)) converging on Oct 23 – 27, ’23 and projecting a likely intermediate peak.”
Gold & Silver (and XAU/HUI) are fulfilling ongoing projections (since May ’23) for a sharp multi-week rally into mid-Oct (Silver) and potentially early-Nov ’23 (Gold). Middle East Cycles collide in Oct ’23 and were powerfully validated with recent events, spurring this quick (brief?) surge in metals. Analysis for sharp, October ’23 surges has initially been fulfilled but Gold could still stretch rally into early-Nov ’23.
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 had been projecting a sharp 2 – 4 week advance in October ’23 – leading into a multi-month peak – and is powerfully reinforcing ongoing analysis for 2024.
How Did 90/10 Rule of Cycles AND 21 MACs Project Sharp Rally in October ’23?
Why are mid-Oct (Silver) & early-Nov ’23 (Gold) Cycle Highs Critical to 2024 Outlook?
Will Middle East War Cycles Impact Gold & Silver in 2024?
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.