XAUUSD bottom confirming Fibo retracement support?

XAUUSD getting support from 61.8% Fibo from the Dec 2015 low to July 2016 rally. Possible 40day and 80day trough may confirm this support? Any views here please?

Hi lionel,

I am watching the sector closely. The $XAU sometimes trades a little different than say the $HUI or the US ETF GDX because of the copper component to many of the holdings (eg. ABX, FCX). And at times the $XAU can give slightly different looks. Here is an update of my Sentient Trader analysis using the gold model I prefer as the nominal model (I have another model for miners but I don’t think it works as well here). The reason I am doing this is because copper has similar short term cycles and is in a bullish position.

The main issue I have been trying to deal with is deciding on the location of the last 45 month peak (ie. next one off of the one in 2011 - orange diamond) and the subsequent half cycle to that. Sentient does not identify the $XAU August peak as 22 month cycle peak (which this seems clearly the case say in my analysis of the $HUI). This really drives the analysis as is crucial to get right.

As for prospects to trade long, I would say a clear buy is not there yet, but close. I would certainly be looking at preferred names in the sector for relative strength here. The 45 month FLD should be providing support in what should be a bullish market for next year.

cheers,
john

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Thanks John for the analysis and the 45month FLD you mentioned should be a good guide. My worry is that if fibo retracement 61.8% support (around 1170) crumbles, the probability of a trough lower than the previous bottom last year increases. Tough market.

We have a short term buy signal for the $XAU based on the 20 day FLD today. The larger cycle lows are pending as shown above and are due to come in at anytime. Price action will confirm the annual cycle low (48 week cycle).
cheers,
john

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Yes, watching silver and gold closely for a long for sure. Regardless of model (original or your own incarnation) the nominal 54 month FLD is looking good for support.

John, hi,

Do you think the gold has bottomed or there are still few squiggles left? Thanks a lot!

Ruslan

Hi Ruslan,

I’ve been waiting to see if price action can confirm a low and so far there is little evidence. The $XAU and the $HUI are holding their 20 day FLDs as support, but that is all you have to hang your hat on here. And with the FED up to bat mid-week, its a tough call. These FLDs sit at approximately ~80 for the $XAU and ~178 for the $HUI early this week.

I think you will have to be patient if you are planning a swing trade long here from this month onward.

cheers,
john

BTW I should add they never make it easy in this space on the downside.

John,

Thanks a lot for your guidance.

Ruslan

The question now is what do we have for the dominant cycle in the precious metals space. Price action and the latest Sentient looks suggest it is the 14 month cycle. If correct, it is almost inevitable that we get a straddle low for the miners and potentially new lows for the metals. The price action off of the US election night first changed the bullish outlook to a mixed picture, and with the break lower for both gold & silver here after FED day to a more bearish scenario into Q1 next year.

John,

Using a count off the topping formation for $HUI, there is potential for 105. And there is an unfilled gap at 133. The metals may take out the last major low, as you suggested, but $HUI may not, and hence form a double bottom. This is all just a scenario, but your thoughts on what period cycle is dominant, and when it is expected to trough, would be appreciated. Thx.

Leo

Between 15 Th april 2013 and 10 th October 2016, there are 9 Cycles for 1274 Calendar Days. An average Cycle of 141.5 CD, Roughly a 5 Months cycle

Next Bottom of the 5 Months Cycle should be end of February / beginning of March 2017 ???

With longer term lower channel lines beneath current price, which would suggest a re-test of the lows 12 months ago, is probable in Q1.

March 20th seems to be the date that pops up in several cycles including lunar cycles and Bradley.
Potential bottoms either the ones suggested by Leo or much deeper touching vtl 45 month down trend lines.imho

For $Gold the 17 month cycle trough appears to be in late Q1 early Q2 2017, which gives a lot of time for price to move lower. Therefore, its likely the December 2015 lows can be tested.

However, a lot will depend on $USDJPY which is inversely correlated to $Gold. $USDJPY 40 week cycle shows a trough in the same time band.

So the two seem to be working against each other, which would suggest a basing consolidation sideways in $Gold for Q1 2017, rather than a continuation of the current impulsive move.

Trying to combine elliott wave with hurst cycles. I think Jan and Feb action in gold shold prove if this downside move goes to new low. 1200 is the level I’m watching closely. Should gold breaks it the next level would be 1240. If this level is taken I will take alt count off the table. In my view we are at the very bullish posture finishing wave 2 with the wave 3 about to start very soon. If this is real wave 2 I would expect 1270-1300 level to be reached by end of Jan-early Feb (short squeeze?). Green semi-circles show simple cycle analysis for gold peaks that can be done in Tradingview. So a meaningful high should be seen in end of March early April. See GLD chart for a longer timeframe.

Well we got the year end low to form. If you blinked you’ve missed an 18% rally in the $HUI (gold miners index) thus far. I’ve not done much here but did add to some long term positions amongst small ST trades. The next few months will be very interesting and I struggle with my Hurst analyses here. Hopefully others can press in with some good cycle analysis.

I want to look again at the HUI going off the analysis I presented in October’s webinar. This look uses the Gold miner nominal model with 45 month, 15 month, 32 week, 16 week cycles versus the metal model which is slightly different. So the question is which model will dominate gold and its miners? For gold it is a 24 and 48 week low that has likely arrived here IMO. Here is Sentient’s view of the $HUI. I’ve done some pinning of the 32 week cycle. Note the top that formed in the summer came virtually as the 32 week was to bottom. Some would call that an inversion but we don’t talk much about inversions in the Hurst world.

The daily chart shows that the 16 week FLD (green) has provided resistance since the summer top. The fantastic sell on US Election night was no doubt a 16 week cycle peak which came early (bearish). Now we have to see how this sector hunts its 15 month cycle low (yellow diamond). For the time being, price has tracked the analysis of the HUI presented in October (see bottom of post). The unknown is how we get through the next few months. The HUI will rise into a 32 week cycle high which is due in March. I’ve no idea how bullish or bearish this next 16 week cycle will be. But I will be looking to see if it is a higher low and, if so, will be an avid investor/buyer as this should set up for another important low.

Here is the short term look. Price crossed the 17 and 34 day FLDs to give a target just over 190 to say ~195. So that short term target has almost been achieved. A top is due early next week for the 68 day cycle. From there the nature of price action will give us a tell on bullishness or lack of it into late March/April when the 15 month cycle low is due.

There are many people calling for sub $1000 gold. I’ve no idea if such targets will be achieved this year. But very important cycle lows for the sector are in play of off last year’s low.

cheers,
john

PS Here is the HUI chart shown in October’s CSTA presentation. It showed a higher low forming into an April low for the 15 month cycle low. This will be the test of any bullishness versus a more bearish view for any yearend rally.

John
Hui touched thr 45 fld from below and immediately was rejected and lost practically 5% from there.
Significant? What does that do to your projections?

misu,

All I know for the time being is that the projected short term top was achieved at HUI 195. This is likely a top forming for the 34 day cycle off the Dec. low. Now we wait to see how this shorter cycle plays out. The next low is projected for mid-Jan. and if bullish, we should see a slightly higher high into late Jan. or early Feb to establish right translation. Then down to the 66 day cycle low in Feb. Holding the Dec. low is key to a bullish market. I expect very choppy trading at best.

cheers,
john

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Misu and John,

All the gold related indices are cycling down into an 80 week low in my opinion. The very consistent 20 week wave (see chart below) just experienced a “magnitude-duration fluctuation” (far right edge of chart) that skewed things a little bit but the shorter daily waves tracked it perfectly. The real test will come when the 80 week wave turns up again to see whether a short to intermediate uptrend can be reestablished.

William

Thank you for posting William. Great stuff. So it is interesting that your bandpass filter results show a similar 23 week cycle for the miners (HUI) much like gold itself (which I believe you’ve shown in prior postings). I use the 24 week cycle for gold and debate using it for the miners. But seeing this output has me questioning that.

I am bullish on this sector because I believe the Dec. 2015 low for Gold and the Jan. 2016 low for the HUI was at least a synchronized bottom for the 45 month, 7.5 and 15 year cycles. My only concern for the time being is whether a straddle low is possible for gold (ie. double bottom with the Dec. 2015 low). I do not think the miners will take out their lows here, and the only issue is whether they can test lower vs this month’s low. The important point in time is the next 23 week cycle low for the sector due in March/April. From there we should have several cycles clearly pointing up.

I’ve always believed that the miners lead the metal on the way up and they lead on the way down as well. We did see leadership in many Australian, Canadian and South African miners on the upside in 2015 before Gold bottomed. The strange thing was the XAU and HUI touched their final lows in January 2016. So if this is the start of a major cycle up (think 7.5 and 15 year cycles), we should see more bullishness at some point in the first part of this year. This is also what Sentient Trader is showing with the nominal model discussed and respective analysis of the HUI.

The caveat is that there is probably an even longer cycle involved here right now and that is why I do not discount the straddle low for gold. There are many that proclaim gold will hit sub $1000. I don’t think anyone can know this with certainty. But cycles say that time is running out fast for this bearish forecast to be achieved. The reason of course is that cycle based evidence will start to confirm the synchronized lows of many important cycles. One thing I note is that the ~7.5 year cycle (off of the 2008 low) is reaching its extreme end of the range if new lows were to be made for the gold and/or the HUI (as seen in the last 3 cycles ie. since 1976).

Counting off your 23 week cycles from the filter results show 8 oscillations from the Oct. 2008 low (45 month, 7.5 year low) to the June 2012 low (45 month low), and another 8 from the June 2012 low to the Dec. 2016 low for the HUI. I also note the filter’s output at the bottom of the page has gone very flat.

Thanks again for posting William. Really love your work.

cheers,
john