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Gold Setting up for a Rally to New All-Time Highs?

By:
Dr. Arnout Ter Schure
Updated: May 12, 2021, 17:25 GMT+00:00

The $1820+/-20 zone was reached but the bears were unable to push GOLD’s continuous contract prices below $1745.

Gold Setting up for a Rally to New All-Time Highs?

In this article:

Previously I was looking for GOLD to rally to $1820+/20 and then drop back to “ideally $1680-1620 before staging a multi-month rally to new all-time highs. Conversely, this rally has already started, but the market has not given us the all-clear signal that is indeed the case.” The $1820+/-20 zone was reached, but the bears were unable to push GOLD’s continuous contract prices below $1745, which was required to usher in the move to $1680-1620, and instead, the Bulls took the ball and ran with it. Thus, the rally to new all-time highs -although originally stated as lower odds- has IMHO already started.

Figure 1. GOLD daily chart with detailed EWP count and technical indicators.

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One last drop before the next rally commences.

As said in my previous article, see here, “The double bottom [in March] does present a bit of a twist. It can mean the entire correction has already been completed and blue wave-V to the low- to mid-2000s is already underway (exemplified by the blue dotted line).” Given the strength of the current rally, albeit it has not broken back above the 200-day Simple Moving Average (SMA) and the upper grey trendline of the downtrend channel price has been in since the July 2020 top, as well as the internal -impulse, looking- wave structure I view the double bottom in late March as the completion of the eight months’ long correction.

Ideally, but not necessarily, GOLD should soon rally marginally higher to around $1860 for a last, smaller wave-degree, 5th wave to complete (back) major-1/a. Then we should see a multi-week retrace back to ideally $1745-1790 for the major wave-2/b, before major wave-3/c takes hold and rallies price to ideally $2045-2090 depending on where wave-1/a tops and wave-2/b bottoms: see dotted black arrows in Figure 1 for the anticipated path.

Bottom line: The Gold Bugs were careful and did not allow GOLD one last time to ideally $1680-1620 before staging a multi-month rally to new all-time highs. Instead, they held the 50-d SMA and rallied price to new uptrend highs. This price action strongly suggests a new, more significant impulse move (see here) has started that should top shorter-term around $1860, drop to $1745-90 before rallying to $2045-90. As long as the Bulls can hold $1725 on any pullback, they are in control.

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About the Author

Dr. Ter Schure founded Intelligent Investing, LLC where he provides detailed daily updates to individuals and private funds on the US markets, Metals & Miners, USD,and Crypto Currencies

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