Forecast: Gold Regains Upside, Cycles Continue Point Higher

Recapping Last Week

Last week's action saw gold forming its low for the week with Wednesday's fed day, with the metal dropping all the way down to a bottom of 1758.50. From there, a firm push higher was seen into late-week, here running all the way up to a Friday peak of 1820.10 - before backing slightly off the same into daily/weekly close.

Gold Market, Short-Term

For the near-term picture, as mentioned last weekend the downward phase of the 10-day cycle was deemed to be in force, with the last short-term low expected to come from this wave, which is shown again on the chart below:

Going further with the above, the expected low for the 10-day wave was also favored to end up as a bottom for the next larger cycle, the 20-day component, which is shown on the next chart:

In terms of patterns, in our Gold Wave Trader report, we noted that the probabilities favored the recent short-term correction to end up as a countertrend affair - ideally holding above the 1721.10 swing low, the prior 20-day trough.

With the action seen into late last week, our expected short-term bottom is now confirmed to be in place, an action which favors additional strength in the days/weeks ahead. This is right in line with our overall assessment of the market - which has been looking for the larger-degree cycles to push higher into mid-to-late November.

From my 10/17/21 article: "the action seen into last week now favors the upward phase of the 72 and 154-day cycles to be back in force. In terms of patterns, the last 72-day trough had to have formed a 'higher-low' - against the August bottom. With the above said and noted, the fact that this 72-day cycle formed a 'higher-low' on its most recent correct tends to favor the 1836.90 swing top (i.e., the last peak for this component) to eventually be taken out on its current upward phase. In terms of time, this 72-day wave is now projecting strength into the mid-November timeframe or later."

As mentioned back in mid-October, the larger 72 and 154-day cycles had confirmed a turn higher, which favored the most recent short-term decline phase to end up as a countertrend affair. Here is the smaller of these two waves, the 72-day cycle:

With the above said and noted, the ideal path is looking for additional strength in the coming days/weeks, before working on the next key price top - expected to come from this 72-day cycle component. From whatever peak that forms with this wave, another correction phase should play out, giving way to another multi-week decline into what looks to be later this year.

Adding to the notes above, we will also be watching with interest to see if our 72-day 'oversold' indicator should drop back below its lower reference line - which is something that we would expect to see ahead of price peak with this 72-day wave.  

The Bottom Line

The overall bottom line is that the short-term cycles have troughed, and with that should be pushing higher in the days/weeks ahead, before topping our larger 72-day cycle for its correction phase into later this year. Until proven otherwise, that decline seems favored to end up as another countertrend affair, giving way to strength again in the following months - before topping the next larger wave, the 154-day component. More on this as we continue to move forward.

Jim Curry
The Gold Wave Trader
http://goldwavetrader.com/
http://cyclewave.homestead.com/

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