GC – long term bearish outlook for Gold
Let me explain you why I do not see a setup for multi year rally in Gold.
The rally off the lows in early 2000’s to the top made at 2,061.50 on 9-9-2011 can not be counted as the Five Wave up fractal.
At best it can be counted as a huge [A]-[B]-[C] up fractal.
Whether its wave [ 1 ] up or a corrective [A]-[B]-[C] structure, it has to be followed by [A]-[B]-[C] structure in opposite direction meaning down.
GC - weekly chart updated on 11-14-2019
The drop down off the 2011 top to the bottom made at 1,150.40 in December 2015 looks impulsive.
Then we can count it as [ A ] down.
Then the whipsaw looking action in Gold from December 2015 to December 2019 can be perfectly counted as wave [ B ] up.
And that leaves us with another impulsive drop in wave [ C ] down targeting 1,060 – 917
That large corrective wave [ b ] up is structured as (A) up, (B) down – (C) up. To complete wave [ B ] up the final subwave ( C ) up has to complete five waves up.
Now lets zoom-in to a Daily chart and you will understand why that impulsive looking rally does not make me super exciting:
GC - weekly chart updated on 11-14-2019
The rally shown on the daily has an impulsive structure. But my macro count on a weekly chart above tells me it could be the final subwave ( C ) up that would complete a large corrective wave [ B ] up setting up for a bid drop in a large wave [ C ] down.
To find potential resistance for the rally in ( C ) of [ B ] up we should apply common retracement ratios to the rally that topped in 2011.
I highlighted those retracement levels with the red arrows on the chart.
If Gold manages to drop in that wave [ C ] down making a higher low then we will be able to say that the rally that topped in 2011 was a huge wave [ 1 ] up followed by a corrective wave [ 2 ] down. That would be a super bullish setup for years ahead!
But that may take another 5+ years because wave [ A ] down took 5 years. Wave [ B ] up has been lasted for 4 years and still has room to go higher. Therefore, we can assume that wave [ C ] down should be at least equal in time to [ A ].
GC - daily chart updated on 11-14-2019
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