Gold Forecast: Gold Short-Term Dip, Then Higher

Chief Analyst & Editor @ Goldwavetrader
August 14, 2022

Recapping Last week

Last week's trading saw Gold forming its bottom in Monday's session, here doing so at the 1786.90 figure. From there, a sharp rally was seen into mid-week, with the metal running up to a Wednesday high of 1824.60 - before backing slightly off the same into the weekly close.

Gold, Short-Term

From the comments made in past articles, the last key low for Gold came from the 10, 20 and 34-day cycles, which bottomed out with the July 22nd tag of the 1696.40 figure (December, 2022 contract). From that low, our outlook called for a significant short- term rally for the metal, which we have obviously seen.

From last weekend: "In terms of price, the 72-day moving average was mentioned as the ideal upside magnet - which is around 36 points above current price levels. With that, the overall assumption is that Friday's pullback will end up as countertrend, giving way to strength again - and higher highs for the move - on the next minor swing up, ideally lasting into mid-month or later."

As mentioned last weekend, the probabilities favored the most recent short-term dip to end up as a countertrend affair, with the 72-day moving average acting as the magnet to the next swing up. With the action seen into last week, we have now met this (72-day moving average) expectation - and thus are now back into short-term topping zone.

The chart below shows our in-between cycle, the 20-day component:

With the above said and noted, the next short-term peak for Gold is now expected to form at anytime - coming from the combination of 10 and 20-day cycles. In terms of price, our Gold Wave Trader noted key resistance to the move at the 1824-1833 region, which was moved into last Wednesday - and which halted the rally for a quick decline into Thursday's session.

Even with the above, it is too early to actually confirm a 10 and 20-day peak to be set in place, though any reversal below the 1797.00 figure (December, 2022 contract) would be our best indication of a turn south with the same.

In terms of price, the next downward phase of the 10 and 20-day cycles is favored to drop back to the 20-day moving average before bottoming, a move which seems likely to end up as countertrend. Support to that decline would also be at or near this same 20-day moving average and/or the lower 20-day cycle band.

Gold's Stepped-Back View

Stepping back slightly, a countertrend dip with the 10 and 20-day cycles in the days ahead - if seen as noted - would be favored to give way to higher highs on the next swing up with these waves. In terms of time, that action would likely put us into the late-August to very early-September timeframe, then to be on the lookout for the next peak with the larger 72-day cycle, shown below:

With the above said and noted, following a short-term dip with the 10 and 20-day cycles, the probabilities now favor higher highs with our 72-day wave into the late-August to early-September timeframe. If we are making higher highs with this 72-day wave into that region, then we will need to be on the lookout for key technical signs that this cycle is topping.

One of the key technical signs that we like to watch is our 72-day 'oversold' indicator. Since this indicator moves inversely to price action, a drop below this lower line would be an indication this particular wave is peaking. Stepping back, the next trough for our 72-day cycle - if made on schedule - is due around October of this year, which now looks to be the next key timeframe for the metal. Stay tuned.

Jim Curry
The Gold Wave Trader

http://goldwavetrader.com/
http://cyclewave.homestead.com/

********

Jim Curry became involved in the markets as an investor in 1988. In the early 1990's he stumbled upon a book/methodology that would change the way he looked at the markets forever. That book was J.M. Hurst's the Profit Magic of Stock Transaction Timing. Hurst's concepts seemed to make perfect sense to Jim, and he has spent the years since coming up with his own cycle/technical analysis methodology.

In 1998 Jim put his cyclic methods to the test by entering the Etrade national options-trading competition, twice (his only two entries ever into the competition). In the first contest he finished in the top 10 out of over 150,000 entrants; in the second entry into the same contest, he just narrowly missed finishing in first place - over quadrupling a $100,000 account in the contest's short time span.

What you are seeing when you view my market reports is a collection of over 30-years of experience in both numeric analysis and spectral methods - and in actually trading the methodology for myself and for the subscribers of my Gold Wave Trader (which covers Gold) and Market Turns (covering U.S. stocks) reports.

You can visit his websites at: http://goldwavetrader.com/ and http://cyclewave.homestead.com/


One ounce of gold is so ductile it can be drawn into a wire 50 miles long
Gold IRA eBook

Gold Eagle twitter                Like Gold Eagle on Facebook