Friday was day 29 for Gold’s daily cycle. Gold is getting late in its timing band to print a daily cycle low. Instead of printing a swing low, gold delivered a bearish surprise on Monday.
Gold broke lower on Monday, extending its daily cycle decline out to day 30. The break lower also breached the intermediate cycle trend line, which signals that the the intermediate cycle is is decline. While this daily cycle did not fail, the prognosis is not good for the next daily cycle. With gold only on week 15, that leaves plenty of time for gold to print one more, failed daily cycle to complete the intermediate cycle decline.
With the dollar on the precipice of an intermediate cycle decline, the expectation would be for gold to be sniffing out the imminent dollar decline and rallying into a new daily cycle. This break in expectation is a warning signal.
Bonds also signaled their intermediate cycle decline on Monday.
Bonds are on day 17 of a failed daily cycle. With bonds on week 22 there is the potential for the forthcoming daily cycle low to also mark the intermediate cycle low. However, I believe that bonds have begun their yearly cycle decline as well.
There are two scenarios for a yearly cycle decline for bonds. The first scenario would see this intermediate cycle extend by one more failed daily cycle extending this intermediate cycle out to about week 28. A second possibility would be for bonds to print another intermediate cycle. That would extend the yearly cycle out to month 18 or 19, which is a low probability scenario.