The 6-Month Cycle
First, I’d like to start by explaining the 6-month cycle in gold. Prices tend to form tradable lows about every 6-months – think of it like breathing. In bear markets, the 6-month lows work progressively lower – In bull markets, progressively higher.
After a prolonged basing pattern, gold exploded above $1400 in June 2019 and established a new bull market. The current pullback is the first 6-month cycle correction in a new bull market. And in my opinion, an outstanding buying opportunity.
In my article, The Odds Favor One More Decline, I cited the potential for a top in the opening days of November. That forecast was timely as prices began breaking lower the very next day. The short-term pattern appears to be setting up for one final decline into early December.
Daily Gold Chart
After a brief consolidation, gold is now set up for the final decline into a 6-month low. All we need is a little downside follow-through below $1455 (possibly next week). The 200-day MA is the ideal target as it crosses $1400.
I’ve outlined a +/- $20.00 target box in the chart above. If prices don’t bottom during the first week of December, then I’ll look for a bottom around the December 11th Fed announcement. I may have to adjust the target once I see the initial reaction lower from the current consolidation.
Our Gold Cycle Indicator (GCI) was explicitly designed to navigate the 6-Month cycle in gold. When it drops below 100 (currently 103), it means prices have met the minimum requirements for a bottom — the lower the number, the better the buying opportunity. A test of $1400 in early December should send the GCI below 50 and into maximum bottoming.
AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit https://goldpredict.com/
