Gold ~ will gold get another high or is the four year bear market rally complete...

Fig 1

Gold got a spike higher on the coronavirus news as the stock market sold off, however, it was short lived and failed to make a new high. All we're waiting for here is to see if the "minor" wave 5 (blue) gives us five sub-waves to one last high above 1611.00 to complete the formation.

Wave [iv] (green) can still be working but, the longer it takes the less likely it becomes. Fig 1 above shows the invalidation line which is the wave 4 low. Breaking below this low at anytime before making a new high will confirm a top is in place. The over 4 year long bear rally from the 2015 low will be complete as "intermediate" wave (C) (red) which will lead to much lower prices.

Fig 2

Notice in Fig 2 that there is a large wave i (pink) in the top left corner and a large wave-ii (pink) in the lower right corner. These labels represent the "cycle" degree time frame (10 years or longer) with the high of wave-i marking the all-time high in the price of gold in 2011.

After the high of 2011 the market completed the bull market going back several decades and reversed into a bear market. Price fell over the next 4 years in a classic Elliott five wave formation.

We talk with a lot of traders and read many market letters that all believe gold started a new bull market from the December 2015 low. We are not in this camp as we believe that the 3 wave rally from the December low is just a bear market corrective rally.

This is why....the decline from 2011 was a large 5 wave formation which means it is only the first wave of a much larger correction taking place. A correction in a bull market or a bear market can't be a single five wave pattern. All corrections take place as 3 waves....labeled as A-B-C,s or as triangle patterns.

Fig 2 shows that the 2015 low was "primary" wave-[A] (dark red). This is how we were able to forecast or predict that over the coming years we would be able to monitor a large three wave rally as a correction of the 5 wave decline.

The "primary" degree waves sub-divide at the "intermediate" degree which is how the chart illustrates the entire three wave corrective rally since 2015 as (A) (B) (C) (red).

The end now should be the "primary" degree wave [B] (dark red) and should lead to a large decline in another 5 wave formation that will be labeled as wave [C] which will complete the [A] [B] [C] correction and to further complete all of "cycle" wave-ii.

Targets we will watch will be where wave [C] equals 61.8% of wave [A] and where [C] is equal to [A]. Also, Fig 2 shows the 750.00 target which represents the "primary" wave [4] low made during the bull market in 2008. This would be classified as the 4th wave of the lessor degree which is a primary target of a correction after a 5 wave impulse formation at any degree.

The good news to this scenario is that the largest bull market in gold history will begin once the "cycle" wave-ii low completes. The time frame is what's hard to determine! We have guide-lines we can use for example...a Fib relationship in time to wave [A] or even equal in time to wave [A]. But, these are just guide-lines and not Elliott rules. One thing of interest we are alert to is that we are in the 8th year since the high of 2011 and February will mark 8 years and 5 months. Both 8 and 5 are key Fibonacci numbers which would mark a significant time frame for the end of the rally.
Stay Tuned!!!

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