“So, I think it is reasonable to expect a rally to begin in the coming week. And, clearly, we will track the nature and structure of that rally to offer a bit more clarity to the smaller degree structures we have presented on our charts. But, the main point I want to convey is that I want to urge each and every one of you to maintain patience over the coming weeks. The Gold Futures chart is presenting us with a very bullish structure,
portending a major rally will likely be seen, likely starting in early 2024, and likely carrying us through the year. Yet, we may still have some further frustrating action to be seen in the coming weeks before that rally can take hold.”
And, we got exactly what we expected this past week. Now, the follow through we see in the coming two weeks will likely tell us how and when we can finally get our break-out and melt-up scenario. To give you a bit of a sneak preview, the gold chart can present us with a more immediate break out scenario, but the silver charts still suggest more of a consolidation/pullback structure before we are ripe for that break out. But, both paths still suggest that 2024 will likely be a very bullish year for the metals complex.
And, As this past week, we saw another example of what happens when an ending diagonal completes, as it often takes us back to the region from which the diagonal originated and in very quick fashion.
This now brings me to silver. And, as I have been saying over the last few days or so, this chart has turned into the more sloppy of the various charts I track in the metals. Of course, we have the [i][ii]1-2 presented in green on the 144-mintue chart, and this would align with the more immediate bullish count I am going to present in gold below.
But, again, I just don’t think this is the most likely path in silver. For one reason, the wave 1 really does count best as a 3-wave structure. And, the second reason is that the wave 2 would be quite unusually deep, and not truly indicative of a 2nd wave in a standard structure. But, should the market continue through 25.80, and then through 27.75, then I have to move into this count, and assume the melt-up is in progress.
For those that think that such a break out sounds ridiculous, please do not completely discount this potential. Once silver is ready, it will likely significantly outperform gold and can mirror the type of parabolic rally seen in 2010-2011. However, at this time, I do not think this is the most likely immediate path for the reasons I just noted.
In the smaller degree structure, last week’s rally counts rather well as a 5-wave rally off this past week’s low. Therefore, it is reasonable to expect another rally to begin in the coming week as the pullback off that rally high looks rather corrective thus far. Therefore, the a=c region is going to be our first resistance point. As it stands right now, that is pointing us towards the 25.70/25.80 region.
If we see a clear 5-wave rally into that region (a c-wave), then I will likely consider adding protective puts, as this could lead us to a [c] wave (crash-like) type structure that could point us down to the 20.18-21.63 region rather quickly in the purple count. This would likely wash out many long positions. But, I want to warn you. Should we see this type of move, it often is followed by an exceptionally strong reversal, which would begin wave iii.
Of course, if the market is able to exceed the 25.80 region in the coming week or two, then it begins to suggest that the yellow count is more likely in play. That would point us towards the 26.50+ region to complete wave 5 in a leading diagonal wave [i], which would then mirror the potential we are tracking in miners . And, as long as that bigger rally holds below the 27.75 region, then it would suggest one more pullback in wave [ii] before the melt-up phase likely begins in 2024.
This now brings me to the gold chart. And, this is arguably the most immediate bullish potential on the charts we track. While I had initially thought this rally off the low would be a first wave in wave 1 of [iii] of iii, with wave 1 pointing us back up towards the highs seen in the 60-minute chart at the top of the pivot box, this initial move off the low is too large for that structure. Therefore, since we reached the .382 extension of waves [i][ii] (the minimum target expectation for wave 1 of [iii]), I have to assume that the rally was all of wave 1 in the most bullish wave count, as shown on the 60-minute Gold chart
But, as you can see from both the 60-minute and 8-minute Gold Futures count, there is a reasonable wave count suggesting that the rally was only the a-wave of a larger [b] wave in a more expanded 2nd wave structure, even though the rally seems to count as a 5-wave structure off last week’s low. Of course, a-waves can certainly be 5-wave rallies, but since it really only happens in the minority of situations, it does tell me to stay on my toes for the potential that it could carry us beyond the [b] wave resistance. But, the [b] wave structure does fit the other charts much better.
If you look closely at the 8-minute chart, it seems we are almost completing the b/2 pullback. Moreover, I have provided a general resistance box for the next rally between 2100-2130 in Gold. That would represent the [b] wave resistance. But, to be honest, I am not seeing that align well with any retracement regions of the decline from last Sunday’s night’s high. So, should the market break out through 2130, then it would signal to me that we are more likely already in the more bullish wave 3, which should have a minimum target of 2230 region, which can be seen on the 60-minute Gold chart.
In summary, and based upon the preponderance of the evidence from the charts we are tracking, it would seem to suggest a rally can begin in the coming week. While that evidence also has me leaning towards still needing one more bout of weakness in the complex after that rally completes, I urge you not to ignore the potential that the GC 60-minute chart may be presenting us. And, if we do see a break out through 2130 in GC, then all bets are off, and we have our initial trigger for the melt-up to begin sooner rather than later. For now, I am still leaning towards later rather than sooner.
Excellent analysis Gold BOOM 🚀
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