We discussed on our website Gold Report last week that the price move to the next cycle turn looked weak and that the potential for a cycle inversion (a low last week on the blue cycle) was a potential. We also said that a close below 1152 would favor a move towards 1122. Last week’s spot low in gold was 1122 !!!
Our discussion was if gold made a low last week, it was possible that “THE CORRECTION” from July could be over. Gold made a low.
The chart below shows what the situation looks like. We spent some time this weekend relooking at all of 2016. Blue cycle lows favor a bullish TREND. As you can see, gold rallied into August where it made a blue cycle inversion HIGH. Blue cycle highs favor a bearish TREND.
Now gold looks to have done another cycle inversion to a BLUE cycle low = Bullish.
Thus its possible that gold is bottoming and completing the correction that began in July. Just because it’s a blue cycle low doesn’t mean gold can’t go under 1122. But it does mean the odds favor gold is going to stop going down and the end of the correction could be ending. As long as gold going forward continues to make blue cycle lows, the odds will favor higher. The next cycle turn is Dec 29th (plus or minus 72 hours). Odds favor gold should begin a bounce into year end. However, volume is going to be real light as we enter the week before Christmas. That means it is not out of the question for gold to continue lower again into another RED CYCLE low. A close below 1113 spot gold would favor it. THAT’s THE SPOT TO WATCH. If we close below there, odds will favor another drop into the 29th towards 1072-1083.
If gold sells off again this week look for 1113-1122 as first support and 1072-1083.
If gold has made a blue cycle low resistance this coming week will be 1144-1152 and 1162-1172 and gold should remain in this bounce into the 29th (plus or minus 72 hours). Then we’ll see if the pattern is bullish looking.
Summary - We still can’t rule out a final low in January but odds favor gold is going to bounce into month’s end, and then we’ll see.