Gold Cycle Maturing

Gold finished on Friday with a bearish engulfing candle. I think prices topped and we should see a pullback. The severity and duration of the next correction will tell us if we should be positioned for higher or lower prices in Q1. At 20 weeks the intermediate cycle is quite mature, at some point, gold will have to drop into a six-month low.

There isn’t enough evidence to support a top in miners…just yet. We should know more once we see Monday and Tuesday’s price action. Cyclically speaking, it looks like miners could reach the next low between January 14th and 18th.

The stock market is bouncing, but I’m not convinced it put in the final low. I think we will see a retest or double bottom in Q1.

I like the potential in oil, but I think prices will dip below $42.00 before putting in the final low. There is ample support around $42.00, and we are getting an upside reaction. A grinding consolidation is possible for a month or two before a dip lower.

GOLD 

It looks like the 30-day gold cycle inverted and peaked on Friday (slightly stretched on day 34). Prices formed a bearish engulfing candle, and we should see a pullback. It’s been 20 weeks since gold bottomed at $1167.10. The six-month cycle is maturing, and prices will need to drop into a cycle low…at some point. Going forward – it would take a clean break above $1315 to constitute a rounded bottom breakout. Whereas progressive closes below $1255 would support an intermediate decline.

SILVER

The MFI is overbought, and prices formed a Doji indecision candle. Prices may still spike higher next week, but I think they should be approaching a top. The next swing high should cap this rally.

PLATINUM 

Platinum rallied nearly 3.5% on Friday breaking free of the triangle consolidation. However, prices remain vulnerable as they trade below the 200-day MA. To support a bullish run prices have to rally and then stay above the 200. A daily close below $800 would trigger a near-term breakdown.

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