Gold Weekly Analysis
Following our extreme alert, gold dropped roughly 20% and then staged a bounce. The key question now is whether the worst is behind us and the metal is ready to resume higher, or whether the damage was more serious and the rebound is only temporary.
To answer what comes next, we turn to our core toolkit—candlestick structure, trend alignment, momentum behavior, and the Elliott Wave context—to assess whether the recent move marks stabilization or just another phase within a broader corrective process.
Candles
If you’ve already read the Silver Weekly and expect gold to be closely aligned, this may come as a surprise. In one of the rarer cases, gold is clearly diverging, and the candlestick picture is materially different.
Most importantly, the weekly frame recovered and did not confirm a reversal. This suggests that the battle near the top is likely to continue and could turn into a prolonged process. On the daily, Friday printed a bullish Inside Up, giving gold a fair chance to extend momentum into the 2D frame on Monday. This stands in sharp contrast to silver, which closed the week with a strong bearish candle and is threatening to extend its bearish momentum to even larger frames.
Overall, while mid-term risks remain on the table, gold is moderately bullish in the short term.
Short term: bullish
Mid term: neutral
ELLIOTT WAVES
Long Term
This long term prospective remains unchanged, as written on January 31; just a refreshed chart.
Blue: The recent top marked wave 3 of an impulse that began in 1999. Under this scenario, the pullback would likely carry gold toward support near the annual Bollinger Band, representing the most gentle outcome. A renewed rally would then be expected after a few months.
Green: The recent top was wave III of an all-time impulse. In this case, gold would be setting up for a more complex ABC correction for wave IV, a process that could take several years. This scenario would align with a return to the 8 EMA support on the annual chart.
Red: The recent top was wave V, assuming wave III ended in 2011. This would be the most severe outcome, implying a prolonged bear market lasting years, if not decades. Confirmation would come only if the current decline, labeled as wave (II), breaks below the 2011 high. This path would correspond to a retracement toward the 20-year EMA support.
That frames the strategy. Now let’s shift the focus to tactics.
Short Term
As anticipated, gold completed a corrective wave down largely in line with the outlined path. The decline, marked as wave c in blue, can be interpreted as impulsive, which frames the initial move lower as wave (a). The subsequent advance may be counted as an impulsive move in purple, although the Fibonacci relationships are highly unusual for gold. More likely, that rally represents a corrective wave a of (b).
The current move can therefore be interpreted either as wave c of (b) in blue or as wave 3 in purple. At this stage, the technicals support both interpretations, and there is no clear separating signal between the two. The blue scenario could, in theory, carry price all the way back to the all-time high. However, even a touch of the ATH would sharply reduce the probability of the blue count and elevate the purple scenario to primary.
If the corrective (abc) hypothesis plays out, the preliminary target for wave (c) is shown on the chart.
Summary:
Gold has completed a corrective decline largely as expected, setting the stage for a rebound. The initial recovery has been constructive, but its structure leaves room for interpretation, keeping both corrective and impulsive paths viable at this stage.
Going forward, gold sits at a key junction. A continuation higher above the prior highs would increasingly favor a renewed impulsive advance, while failure to do so would keep the move classified as part of a broader corrective process. Until a decisive signal emerges, short-term strength is constructive, but the mid-term outlook remains conditional on follow-through.
