Gold Weekly Analysis
In this analysis, we’ll review XAUUSD, gold futures, and GLD across multiple frames—candlesticks, Elliott Wave structure, and momentum—to decode what the latest prints signal about the next major leg.
CANDLES
GLD
Another doji, no direction. More patience is required, but time is working against the bulls.
Gold
The potential bullish move on the weekly has been negated. Shorter-term odds are close to neutral, leaning bearish, with no clear directional candle. With this level of uncertainty, gold could continue to move sideways, and such price action would likely result in a bearish Inside candle on the monthly frame.
I’ll keep the following excerpt from the October monthly report as a reminder during November: “The monthly closed with a candle that could turn bullish or bearish, depending on the next print. At this point, it is more vulnerable to a topping sequence—an Inside candle or a Bearish Engulfing. A bullish November candle would require an extreme technical stretch. As a reminder, the monthly RSI is now the second highest since the Nixon Shock; the only higher reading—in 1973—was followed by a ~50% drawdown over the next two years.”
I’ve already covered the statistical implications of September’s close in the monthly/quarterly report.
As outlined in the August 21 Long-Term Outlook, gold is likely building a significant top—one that could take months to complete. That hypothesis stands.
Gold – Long Term Outlook – August 21
As discussed previously, “a particular concern is the continued no-break advance in the monthly RSI, which has not been this elevated since 1980—45 years ago. Apparently, this implies a new reality in which gold is never corrected again. However, statistical analysis suggests a potential loss of about 35% if gold follows the average historical path after such an RSI stretch. In May, gold formed a bearish candle—June will show whether that signal is confirmed. Gold is now in a zugzwang position: any move on the monthly frame will only worsen either the technical conditions or the candle structure.”
Elliott Wave: Gold Spot
After invalidating an impulse up, gold formed an impulse down, marked as wave (i) in blue. I would prefer this impulse to be much larger so that we could confidently treat it as wave C of an ABC/WXY correction. As it stands, while the WXY in red remains on the table, the blue count looks rather dangerous, though not surprising. Gold is possibly forming a bearish flag for wave (ii), which would then be followed by wave (iii), potentially starting on Black Friday or December 1. Watch for an Ending Diagonal in wave c of (ii) — it could serve as an advance warning of a sharp vertical drop in wave (iii).
Summary:
Gold’s bullish attempts have been rejected on the short- and mid-term frames. While there is no strong directional candle yet, the broader bearish case continues to build. If bulls remain inactive next week, the month-end closure is likely to be decisively bearish.
After Elliott Waves signaled a major failure to the upside, gold formed an impulse down, followed by a corrective wave up that will likely lead to another leg lower. As discussed last week, the count effectively needs a reset via a new lower low, and we still do not know how deep that move will be. The most favorable scenario would be a completed WXY correction in red, but the odds of this outcome appear rather low.
If gold respects classical ratios for the current wave down, it could be forming an ABC structure with C = 1.618 × A, which may represent only wave (A) of a much larger correction, potentially lasting several quarters or even years.
Happy Trading!
