Gold was likely consolidated the whole week before moving lower. Candles and TA do not show a solid sign of bottom yet. Let’s explore the hypothesis from different angles.
The current monthly candle has extended below 8 EMA line and is on track to completing a Bearish Engulfing or a Dark Cloud Cover.
Unless gold rallies to above ~$1840 (at least 3.5%) on Monday-Wednesday, it will form a bearish monthly candle.
Last week the candles formed a 7-week Tower Top, a very strong bearish statement. This week the candle is viewed as a pause after the strong decline.
So far, neither the candle structure nor indicators support a possible bottom/reversal. Most likely, the next week produces another consolidation candle in a tight range.
The daily has the most interesting development. At the beginning of the week, it was a strong bullish message (large green candle on Monday). However, the rally attempt was clearly cancelled by the next four candles. All that time the price stayed below the 100 MA and 8 EMA lines. TA also suggest that the current build up is rather consolidate before moving further down than the bottoming.
In my previous weekly I suggested that “We might also see a horizontal development for 1+ weeks (wave 4)”. So far, the forecast is followed well.
Elliott Waves Perspective
Last week I charted the wave and the channel that points towards $1650-1720 in the next few weeks. Some indicators point that wave 3 on the chart could be extended. In this case (I would know about it only after it completes), the targets would move lower.
Note, that the first sign of bottom would be a strong green candle with a closure above ~$1825.
This is the summary of targets on multiple frames that I discussed in details in the previous weekly and long forecast write-up (the link below):
- Monthly: $1280-1550
- Weekly: $1420-1680
- Daily: $1650-1720
The monthly closing print on Jun 30 would be critical for the discussion on the long term direction.
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Previous Weekly & Long Term Forecast:
GDX Weekly Analysis: