Gold – my bearish count got invalidated
Off the major top made by gold in September 2011 at 2,076 it dropped in a corrective fashion and bottomed at 1,165 in December 2015.
Many bulls believe that was the whole correction and off that 2015 low a new rally started,
For me that means they count the 2011 top as a major wave ( 3 ) up and the drop that followed as a macro corrective wave ( 4 ) down.
That is a reasonable assumption and I can live with that.
However, under that bullish count gold had to rally in an impulsive structure in subwave ( A ) of wave ( 5 ) up off 2015 low.
The problem is that subwave ( A ) of wave ( 5 ) had to come as a strong rally and push price back up to the top made by wave ( 3 ) up in Sep 2011.
However, in that case four years passed since the bottom of wave ( 4 ) down was made in 2015 but price is nowhere close to the top made in Sep 2011!
Moreover, look at the blue zig-zag structure off the December 2015 low, It can not be considered impulsive. It looks rather corrective.
That considerations make me find an alternative bearish count that considers that overlapping move up off 2015 low as a corrective structure of wave ( B ) up to be followed by another impulsive drop in wave ( C ) down.
GC - weekly chart updated on 4-14-2020
We had a great bearish count but sometimes even clean counts get invalidated.
That blue (A)-(B)-(C) pullback could be all of wave ( B ) up. When Gold dropped sharply to 1,460 and violated the previous low that was a great confirmation of completion of that move up.
However, on April 6, 2020 Gold managed to make a new higher high and invalidated the original simple bearish count.
Such a straight drop without any A-B-C subdivision could very well be a technical wave -X- that connects two (A)-(B)-(C) structures in the Double Three correction.
Then the rally that we are watching now is the first subwave ( A ) inside the second (A)-(B)-(C) up structure (see the weekly chart above),
That rally in subwave ( A ) up could top already.
It’s barely possible to predict where subwave A up of a new A-B-C structure may top. We will be able to work with retracements for a corrective subwave B down and then with projections for the final subwave C up.
GC - daily chart updated on 4-06-2020
Here we can note that gold got stuck at 1,758, a meaningful 66.7% retracement of the move down that started at the all time low in Sep 2011 to the bottom made in Dec 2015.
If that rally in subwave ( A ) has topped we may get a corrective looking decline in subwave ( B ) down structured as A-B-C. That pullback can retrace 50% – 66.7% of that rally ( 1,624 – 1,538).
GC - daily chart updated on 4-14-2020
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