I expected gold to hit ~$1550 or less in 2021-2022. I think it is on track after today’s closure. The chart above was made on August 15, 2020. The chart below – today, the same chart with all graphic elements.
Let’s explore the hypothesis from different Angles.
I compared the waves, candles and technical indicators in 2012 and 2021. There are multiple similarities. This time, though, the magnitude is bigger, so it would not be surprising if the downturn is sharper and/or deeper. From the candles perspective, June is not finished and the current Bearish Engulfing could turn into a less bearish shape. However, with today’s weekly candle, the odds for getting the Engulfing are high.
Odds: Strong Bearish
The weekly candles formed a 7-week Tower Top, a very strong bearish statement. It is well supported by the falling indicators.
From the perspective of waves, the red rectangle shows the most probable targets for wave (C) $1420-1680 that are most typical runs for wave (C) from the perspective of Fibonacci and Elliott Waves.
At the same time, we need to remember the monthly chart and the hypothesis that the wave that started in August should be a motive wave and have a 1-5 counts. So far, it is not clear how to place such count and I am assuming that the whole wave off the August high could be a giant ending diagonal. Perhaps it would explain many sudden large moves up and down during this period of time. I keep this potential count in red on the chart.
Odds: Strong Bearish
After the daily Bearish Engulfing on Jun 1, gold formed multiple bearish combos that signal further decline. However, the metal is very oversold on daily and there is a possibility of a short rally to normalize RSI at the beginning of next week. We might also see a horizontal development for 1+ weeks (wave 4) as I mentioned in my previous daily analysis.
I charted the wave and the channel that points towards $1650-1720 in the next 2-3 weeks. However, if the wave becomes extended (that nobody could ever foresee, but not unusual for the metals), there is a chance of going deeper.
Also note, that the first sign of the bottom would be a strong green candle with a closure above ~$1825.
Summary of targets on multiple frames:
- Monthly: $1280-1550
- Weekly: $1420-1680
- Daily: $1650-1720
Let’s see how it plays.
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Alert on June 18:
Alert on June 15:
Alert #1 on June 1:
Alert #2 on June 3:
Alert #3 on Jun 9:
GDX Weekly Analysis: