Gold Weekly Analysis
Silver surged nearly 20% in December, while gold has managed barely a 2% gain. Why the divergence—and what is the market trying to tell us? In this analysis, we examine XAUUSD, gold futures, and GLD across multiple time frames, aligning candlestick structure, Elliott Wave context, and momentum dynamics to determine whether gold is setting up for continuation—or flashing an early warning of reversal.
Elliott Wave: Gold Spot
From an Elliott Wave perspective, the primary reason gold has been moving almost horizontally lies in its wave structure. Most likely, the metal is completing an ending diagonal, either under the green or the purple count. With price sitting just a few points below the all-time high, this level becomes the key watershed.
If gold fails to record a new ATH, the more likely outcome would be a sizeable pullback into the purple rectangle, unfolding as a relatively controlled ABC correction in purple. If, however, gold pushes to a new ATH, it could be completing a much larger diagonal under the green count. In that case, the subsequent pullback would be far less predictable and could evolve into a much deeper correction than many currently expect—especially if the initial move lower develops as an impulse.
The resolution should become clear very soon, likely within the remaining days of the year.
GLD
We are now seeing an almost perfect fractal between GLD and Tesla in 2021. After an initial sharp move lower, price rebounded to near the prior all-time high. The weekly red candle of October remains active, and the risk stays elevated until GLD closes above that candle’s high.
Gold
Gold is neutral following the daily and weekly closures. The key moment now shifts to the annual and monthly close. The open question is whether a new ATH is recorded in December, delayed into January, or not made at all. Failure to achieve a new ATH in December would almost certainly leave multiple large frames closing bearish. A December ATH, on the other hand, would open several possible paths, each dependent on the subsequent move.
It makes sense to wait a few more days and revisit the discussion once the final prints are in place. And as a reminder—this is a bullish trend operating under grossly overextended technical conditions.
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.”
Summary:
Gold remains broadly neutral from a candlestick and signal perspective, with several critical decisions deferred to the upcoming monthly and annual closes. From an Elliott Wave perspective, the metal appears to be completing an ending diagonal—likely wave v of (c) of B—placing price near a decisive inflection point. Resolution in either direction could be swift, with a completed diagonal carrying elevated risk of a sharp downward move. Patience remains warranted.
Happy Trading!
