Gold Forecast: Gold Following The Cyclic Script

Recapping Last Week

Last week's action saw gold dropping down into mid-week, here forming its low in Wednesday's session with the tag of the 1789.10 figure. From there, a push back to higher highs for the swing was seen into late-week, with the metal hitting a late-Friday peak of 1831.40 - before backing just slightly off the same into the daily/weekly close. 

Gold Cycles, Short-Term

For the short-term picture, as mentioned in past articles, the upward phase of the 20- cycle was seen as being in force, which favored additional upside for the metal. Going further, the upward phase of the larger 34-day wave was later deemed to be in force:

From last weekend: "the ideal path favors a continuation of the late-week strength into the coming week, with the upward phase of the larger-tracked 34-day cycle also now seen as in force. In terms of time, the upward phase of this 34-day wave is only 6 trading days along, with the normal rally phases having taken some 10-18 days before topping. With that, the inference is looking for additional strength in the days ahead, before either of the 20 or 34-day cycles next attempt to peak."

As noted in my last article, the probabilities favored additional short-term strength, simply due to the configuration of the 20 and 34-day waves. Here again is the larger of these cycles, the 34-day component:

Until proven otherwise, the upward phase of our 34-day cycle is still deemed to be in force, and is only 11 trading days along - still with the potential for additional upside before its next peak attempts to form.

Gold's Stepped-Back View

As mentioned in prior articles, the last bottom of significance was expected to come from our larger 72-day cycle, which is shown again on the chart below:

In terms of time, our 72-day cycle was projected to trough around the mid-to-late December timeframe, with its actual bottom now confirmed to have been registered with the 12/15/21 tag of the 1753.00 figure.

From my 12/12/21 article: "In terms of price with the above, the ideal path is looking for the current 72-day cycle downward phase is looking for a drop back to the lower 72-day cycle band, which is currently at the 1741 figure - but which is also moving daily. Going further, a drop back to the lower 72-day cycle band - and/or accompanied by a spike above our upper 72-day 'oversold' reference line - would be seen as a buying opportunity, in the anticipation of a sharp rally playing out into the first few months of next year."

As mentioned above, the probabilities favored the last correction phase of the 72-day wave to make a tag of the lower 72-day cycle band, which we did do - right into the aforementioned mid-December area. At the very same time, we also saw our 72-day 'oversold' indicator making a tag of its upper reference line - which is something we will often see prior to key lows with this particular component.

With the above said and noted, our ideal path for the coming weeks is looking for additional strength with this 72-day cycle, potentially into the mid-January to mid- February region. On or into that timeframe, the next peak should form with this wave, giving way to another larger percentage decline into the mid-to-late Spring.

Going further with the above, there should be technical signs of the next 72-day top forming, with the number one being our 72-day 'oversold' indicator dropping back below its lower reference line. Right now, it is only about 2/3 of the way there, thus offering up the potential for additional price strength before this wave next tops.

The Bottom Line

The overall bottom line with the above is that the upward phase of the 72-day cycle is seen as in force, ideally looking for additional strength in the coming weeks - before forming the next key top for gold. From that high, a good percentage correction is expected to play out in the weeks/months to follow, with the next mid-term trough due on or after the late-Spring, 2022 period. Stay tuned.

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

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