I have received some emails today that expressed a concern that gold’s daily cycle may roll over and print a failed daily cycle. Let’s take a look.
Wednesday, Gold formed a swing low off the 10/07 low and recovered the 200 day MA to signal a new daily cycle. So while gold did close lower today, gold still managed to print a higher high and close above the 200 day MA. So unless gold breaks below the 10/07 low of 1243.20 we need to be patient.
There are 2 bullish observations:
The first is that gold has been resisting a strong dollar rally. The second is this is beginning to look a lot like the previous intermediate cycle low. The True Strength Indicator reached the same level as the last intermediate low and has now delivered a bullish zero line crossover. Also the previous intermediate low needed a few days before getting some traction. And gold finally found some traction once the dollar rolled over.
Thursday was day 30 for the dollar’s daily cycle. The dollar is getting late in its timing band to seek out its daily cycle low. At this late stage, a swing high should mark the daily cycle peak and send the dollar into a daily cycle decline.
And the dollar dropping into a daily cycle decline should send gold higher.