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Gold's Short-Term Rally Phase Back In Force

Chief Analyst & Editor @ Goldwavetrader

October 3, 2021

Recap of Last Week

Last week's action saw Gold holding weaker into Wednesday's session, with the metal dropping all the way down to a low of 1721.10. From there, however, a sharp reversal to the upside was seen into Friday, here running all the way up to a peak of 1765.20 - before backing slightly off the same to end the week.

Gold Market, Short-Term

For the near-term picture, as noted last weekend another short-term low was due to materialize for Gold, coming again as the result of the 10-day cycle, shown below:

From last weekend: "when a cycle fails to make a tag of its moving average, the market will often make another attempt at the same. With that, we may be nearing another short-term low and bounce phase with Gold."

As mentioned last weekend, since no tag of the 20-day moving average was seen on the prior swing up (into the 9/22 peak), the probabilities favored a short-term bottom forming (coming from the 10-day wave), and then yet another try at the higher 20-day moving average on the next swing up - which we are now in.

Going further with the above, very early in Thursday's session we were able to confirm this short-term bottom in place, doing so with a special e-mail alert. With that, the ideal path is looking for additional strength in the coming days, though the overall move up is favored to end up as a countertrend affair, due to the position of the larger 72 and 154-day cycles, with the smaller 72-day wave shown below:

Going further with the above, a countertrend rally for Gold means one that remains below the 1836.90 swing top. If seen, then the next short-term downward phase (i.e., 10 and 20-day cycles) should be favored to give way to lower lows into the late-October to early-November timeframe - which is the ideal bottoming zone for the larger 72 and 154-day cycles. Here again is the larger 154-day component:

Otherwise, until a lower level materializes, any reversal back above the 1836.90 swing top would be our indication that the 72 and 154-day cycles have bottomed. With that, as mentioned, the overall assumption is that the current rally phase of the short-term waves will remain below that key figure, with resistance to the current swing up being the 1785-1800 level for Gold.

Stepping back, lower lows into late-October to early-November - if seen as expected - would be the ideal spot to be on the lookout for the 72 and 154-day waves to bottom. At that time, we could see our 72-day 'oversold' indicator spiking back above its upper reference line, something seen closer to mid-term bottoms with the metal. We will also be on the lookout for any supporting technical evidence, should that be seen.

For the mid-term picture, as mentioned in past reports, from whatever low that does end up forming with the larger 72 and 154-day cycles, the probabilities will favor a sharp rally playing out into what looks to be early next year. That rally should be somewhere in the neighborhood of 20% off the lows, which is the statistical average rally for the larger 154-day component. More as we continue to move forward.

Jim Curry
The Gold Wave Trader
http://goldwavetrader.com/
http://cyclewave.homestead.com/

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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/