Danger Zone

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Gold formed a swing low off the day 34 low. But has yet to deliver confirmation of a new daily cycle. Gold is close to entering the Danger Zone.

gld

A break below 1072.30 will continue gold’s daily cycle decline. A similar set up occurred in early July where gold broke below the day 22 low, then needed 7 days to exhaust the selling.

However, a break above 1104.40 will likely signal that day 34 did mark the daily cycle low. The fact that gold did managed to close above the lows in the face of the dollar rallying keeps alive a day 34 daily cycle low scenario.

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The dollar formed a swing low and delivered a declining trend line break today to confirm Thursday as day 3 of a new daily cycle. The dollar has now begun its third daily cycle for the current intermediate cycle. Since the intermediate dollar cycle is typically comprised of 3 – 4 daily cycles we will need to keep in mind the possibility of this daily cycle peaking around day 8 to form a left translated cycle.

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