Gold Trading: Second Sell-off Expected to Bottom Around Nov. 11. XAU Remains Bullish – On Track for Surge to ~102.00 into Dec. ‘19.
11/09/19 Weekly Re-Lay: “Gold, Silver & the XAU completed their rallies into the week of Nov. 4 – 8, reversing lower and selling off in line with Gold’s daily & weekly trend…
Gold & Silver turned back down on Nov. 4, showing new weakness after fulfilling the minimum expected of the rally from mid-Oct. (with Gold remaining in a negative daily trend). When Gold’s weekly trend turned down on Oct. 11, it generated two primary expectations:
— The time for an initial multi-week low and reactive 1 – 3 week bounce was at hand. That would likely spur a Gold rally into late-Oct.
— It assured that a second decline would follow (likely beginning on Nov. 4 – 8), taking Gold to new correction lows and signaling an escalation of its overall decline (perpetuating Gold’s relative ‘weakness’ versus Silver, a shift that took hold in July ’19).
At the same time, Silver & the XAU produced divergent signals. They, too, projected rallies into early-Nov. with the XAU remaining in the most bullish structure and capable of extending that rally as far as Nov. 6 – 8.
The XAU had two key levels of resistance – one for an initial rally into early-Nov. (~98.00/XAU) and the other for a larger-degree advance into early-Dec. (~102.00/XAU). The former level provided the ceiling for the initial rally.
There are a few key takeaways from the events of the past week, each of which has an influence on future expectations:
1 – Metals turned lower at the earliest possible point (Nov. 4), exhibiting some additional weakness on a 2 – 4 week basis. Gold remained in its daily downtrend (projecting a drop to new lows) as the XAU could only make it up to 95.98.
2 – Silver ultimately turned its weekly trend down, joining Gold and significantly reducing the potential for a retest of its high in 2019.
3 – Silver spiked into its primary (multi-month) downside target at 16.50 – 16.80/SIZ.
#2 & #3, combined with the ongoing resilience in the XAU, usher in the potential for another multi-week low (and reactive 1 – 3 week bounce in Silver) to take hold in the coming week(s).
There are other reasons why the coming weeks could be pivotal. Most of these deal with the monthly trend, monthly cycles, monthly 21 MACs and larger-degree wave structure – topics that are usually reserved for INSIIDE Track…
Gold & Silver have the potential to set a secondary (higher) low in Nov. ’19 – 1 year (360 degrees) from Silver’s major low in Nov. ’18. That would also perpetuate ~6-month/~180-degree low (Nov. ’18) – low (May ’19) – low (Nov. ’19) Cycle Progressions – most obvious in Silver.
From a price/wave perspective, Silver’s test of its 16.50 – 16.80/SI downside target means it is attacking the highs of Jan. ’19 – a pivotal level of 6 – 12 month ‘resistance turned into support’.
At the same time, it is completing a .618 (Golden/ Fibonacci Ratio) retracement of its entire 2019 advance… AND testing the level of its monthly 21 High MAC as that channel is flattening and beginning to turn positive.
Silver has been trading above that channel since early-Aug., so a return to it is a textbook ‘test of strength’ move that should be followed by a new rally. These are various forms of support.
Since these are all monthly-related levels and indicators, more leeway is inherent in them. So, Silver could still see additional downside (perhaps reaching 16.50/SIZ) before a final low takes hold.
Another reason (for the pivotal nature of the next 1 – 2 weeks) involves the projected future cycle high on Dec. 2 – 13 (and ultimately, the projected cycle high for ~March 2020). Leading into that potential (1 – 2 month) peak, one of the keys will be the weekly trend patterns.
Since it would take at least three weeks for the weekly trends to turn back up (or a minimum of three weeks for those weekly trends to turn neutral twice and then peak without turning up), a low would have to be intact around mid-Nov. in order to leave enough time for a ~3-week rally.
In the case of Gold, there are multiple timing indicators that could produce an intermediate low in the coming week…
They include the potential for successive, 10-week corrections (late-Feb. – early-May and early-Sept. – Nov. 11 – 15) – a potential ‘4th wave = 2nd wave (duration)’ prior to a ‘5th’ wave advance. A low would also perpetuate a 36 – 40 day low (May 2) – low (June 11) – high (July 19) – high (Aug. 26) – low (Oct. 1) – low (Nov. 6 – 11) Cycle Sequence…
The XAU fell a couple points shy of its initial target (98.00/XAU) and peaked during the early part of expectations, ushering in a correction a little sooner – and from a little lower – than ideally expected.
By turning its daily trend down on Nov. 7, it confirmed the preceding (multi-week) advance was complete and that additional upside would not be seen until a comparable correction (50% or .618 of that initial rally) had intervened.
Daily cycles, and the intra-month trends, could stretch this correction into Nov. 13 – 15 but a low at any point in the coming week would set the stage for a second rally into Dec. 2 – 13… and potentially up to 102.00/XAU.
The XAU continues to validate the low it set while perpetuating an 18 – 19 week low-low-low-(low) Cycle Progression in October – a cycle that was fulfilled while that Index was attacking its intermediate downside target at 86.00 – 86.80/XAU (low was 86.84/XAU).
The weekly trend pattern remains constructive, which is why the XAU could rally back to its 3Q ’19 high while advancing into the first half of Dec. ’19 – the next phase of a consistent 13 – 14 week cycle in Gold and the XAU (and the midpoint of the latest 27 – 29 week cycle).”
Gold enters new decline after fulfilling projections for ~3-week bounce from mid-Oct. – in lockstep with weekly trend signal. Silver poised to test multi-month support (~16.50/SI) and could bottom – along with Gold – around Nov. 11.
Why is New Rally Expected from mid-Nov. into Dec. 9 – 13?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.