I saw the potential for market-changing news over the weekend, but I did not expect it to be on the vaccine front. Pfizer announced a successful vaccine, and gold is plummeting.

Our cycles supported a turning point in precious metals around November 6th (+/- a few trading days). I assumed it would time a low aligned with our 6-month target. Today's market action to the vaccine suggests that instead of a low - gold inverted and formed a high overnight. The election fiasco kept gold elevated long enough to force the cycle to invert. Subsequently, gold pushed its 6-month low into the last half of December. 

GOLD 4-HOUR

Gold prices plummet after Pfizer announced a vaccine that was reported to be 90% effective. This news event forced an inverted cycle, and we expect an initial collapse to $1810 - $1820 (beginning now).

Updated 6-Month Target

Today's inverted cycle peak supports a December target surrounding $1750 for an ABC measured correction. At least that is my initial impression, given today's action. We will know more over the next 48-hours.  

After an initial collapse to $1810 - $1820 (beginning now). We could see a 3 to 4-week consolidation followed by and a final drop in the last half of December. 

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Gold prices continue to correct from the new all-time high set on August 6, 2020. On that date, gold hit $2,074 per ounce – the highest cost to purchase one ounce of gold in the history of mankind. Since that point, gold has corrected some $226 or 10.9% to the recent low of $1,848 on September 28.

What is next for the price of gold? Has this been a major long-term top, or is there more upside to come?

Our analysis suggests the later – that gold is about to embark on a major new up-leg which should take it well above the recent $2,074 high.

Further, the timing of this next advance may be sooner than most people expect… perhaps as soon as weeks following the US election on November 3.

The time to prepare for this investment scenario is now.

Gold is Retesting Its Former All-Time High

It is critical that investors grasp the big picture for gold: the 5,000-year store of wealth is presently retesting its former 2011 all-time high resistance zone:

On the chart above we can see that this resistance zone existed between $1,800 and $1,920 (black). This was a region in which gold was unable to advance on four occasions between 2011 – 2012.

Following the bear market of 2011 – 2015 and subsequent recovery, gold finally broke out above its 2011 peak in early 2020 (red callout). It then subsequently made a new higher peak than in 2011 at $2,074 per ounce.

Gold is now coming back into the former resistance zone to retest that zone.

What is a retest?

A retest is a process whereby sellers are daring buyers to show up for a second time as they did during an important breakout.

The rule in technical analysis is: “Breakouts should be respected until proven otherwise.” With gold now back into the mid-$1800’s, we should expect those buyers to show up again now that the price has retreated into the former zone where the breakout first occurred.

This analysis suggests that downside is limited for gold going forward, as it should fall no further than the low $1,800’s on this correction.

Following a successful retest, a significant continuation advance is expected.

Wedge Pattern Confirms Local Bottom

Do we have any confirming or denying evidence that gold may be trying to form an important bottom in the region of its former all-time high resistance zone from 2011?

Yes we do – and it comes from a closer examination of the short-term price action:

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