Golden Conundrum

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Gold is in its timing band to print an intermediate (weekly) cycle low. Therefore our expectation is to see gold form a failed daily cycle to lead into the intermediate cycle decline. However, gold delivered a bullish surprise on Monday and rallied for 1.44%.

gld

Monday was day 10 for the daily gold cycle. During the decline into the recent daily cycle low, gold did not close below the lower daily cycle band. Today, gold closed above the upper daily cycle band signaling a continuation of gold’s daily uptrend. Gold is in a pattern of printing higher lows and higher highs, so therefore gold has not printed a failed daily cycle, which presents us with a conundrum.

gld weekly

After peaking on week 14 gold formed a weekly swing high. Gold closed below the upper weekly cycle band and printed its lowest point on week 17, which is 1 week shy of the normal timing band for an intermediate cycle low. This week gold has formed a weekly swing low and broke above the declining weekly trend line which signal that week 17 hosted an intermediate cycle low.

Without a failed daily cycle I am reluctant to label week 17 as the intermediate cycle low. However, gold has been delivering bullish surprises and there is a risk that week 17 was the intermediate low.

Cycle Bands tell us that gold has closed above the upper daily cycle band, continuing its daily uptrend. That also signals that an intermediate cycle low has been left behind.

Gold is currently above the upper weekly cycle band. A close above the upper weekly cycle band will indicate that gold is also continuing its weekly uptrend.

Therefore I am going to label week 17 as the intermediate cycle low. Gold is establishing a daily and weekly uptrend. If I am wrong and gold drops into an intermediate decline from here, any drawdown should be corrected by the advancing gold bull.

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