Gold Forecast: Gold & U.S. Stock Cycles Update
Since my last article posted back in mid-August, Gold has seen additional strength, with the metal running up to a recent high of 4755.00 (December, 2026 contract). From there, a decent pullback was seen into late last week, which could be the beginning of a slightly bigger correction. As for U.S. stocks, a larger-degree correction is due to unfold.
First, a look at the current position of the Gold cycles.
Gold's 10-Day Cycle
For the very short-term, the smallest cycle that we track in our Gold Wave Trader report is the 10-day cycle in Gold, which is shown again on the chart below:
In terms of price, we noted the 4648.00 figure (December, 2026 contract) as the downside 'reversal point' for this 10-day cycle. In other words, once broken below the downward phase of this wave would be confirmed to be in force, thus favoring a minimum drop back to the 10-day moving average. This break was seen into last Wednesday, which saw another 150 points of additional weakness into Friday's session.
In terms of time, the next trough for our 10-day cycle in Gold is projected for the early-September window, where it will likely turn up for what could/should be a decent 3-5 day (ideally, countertrend) rally.
Gold's 34-Day Cycle
Stepping back, the most dominant short-term cycle that we track is the 34-day wave in Gold, which is shown again on the chart below:
As mentioned back in mid-August, the next peak (and correction) of significance was expected to come from this 34-day cycle in Gold. In terms of price, I mentioned that the downside 'risk' was back to the 34-day moving average, and/or the lower 72-day cycle channel - each of which were well below recent price levels.
In terms of price, it was the July 6th reversal above the 4211.90 figure which confirmed the last upward phase of this 34-day cycle to be in force. From that bullish/upside reversal, Gold saw well over 500 points of additional rally into the most recent swing high of 4755.00 (December, 2026 contract).
With the most recent action, the probabilities tend to favor this 34-day cycle to have started to turn south, though we will need to take out a key downside 'reversal point' figure for price, in order to best confirm. This number will be posted soon, in our thrice- weekly Gold Wave Trader report.
Gold's 72-Day Cycle
Stepping back slightly, the last low for our larger 72-day cycle in Gold was registered back in late-June, which was in the average expected bottoming range for this wave, and mentioned back in some prior articles.
Shown below is our 72-day cycle in Gold:
In terms of time, the upward phase of our 72-day wave is favored to hold up into the late-September window. Having said that, as mentioned above, a sharp correction is expected to play out in-between, coming from the smaller 34-day cycle.
Due to the bullish position of the bigger 72-day wave, the coming correction phase of our smaller 34-day cycle is favored to end up as a countertrend affair, with key support around the aforementioned 34-day moving average, as well as the lower (and currently rising) 72-day cycle channel.
Going further with the above, a countertrend correction with our 34-day cycle in the coming day/weeks - if seen as noted - would be expected to give way to higher highs on the next swing up. In other words, a mid-September (plus or minus) trough would be expected to give way to higher highs into late-September, before peaking our larger 72-day component, for its correction into mid-to-late October.
U.S. Stock Market (Update)
As mentioned in my past articles, the last key low for the SPX (i.e., the S&P 500 index) was made back in late-March, which was our last 180-day cycle bottom. In terms of time, my analysis projected the upward phase of this 180-day cycle higher into the late-July to mid-August window, where it would be expected to peak.
Here again is that 180-day wave in U.S. stocks:
In terms of time, we are into the expected topping window for this 180-day cycle. With that, we are on the lookout for a fairly sharp correction, with the next 180-day trough projected for the late-September to mid-October window.
In terms of price, the downside 'risk' is back to the rising 200-day moving average on the SPX, into that late-September to mid-October timeframe. This moving average could also act as key support (plus or minus) to correction phase of this 180-day wave.
With the above said and noted, we have identified a key downside 'reversal point' for this 180-day time cycle in U.S. stocks, which - once taken out - will be the trigger that the correction phase of this wave is in force. This number will be posted in our daily Market Turns report, which tracks the U.S. stock market.
For the mid-term view, the correction phase of this 180-day cycle is anticipated to end up as a larger countertrend affair, holding above the late-March trough of 6316.91 SPX CASH. If correct, a late-September to mid-October low would be expected to give way to a sharp 20-25% rally on the SPX, with that rally ideally playing out into the Spring of next year - before setting up yet another, larger-degree peak. Stay tuned.
Jim Curry
The Gold Wave Trader
Market Turns Advisory
http://goldwavetrader.com/
http://cyclewave.homestead.com/
********
