Gold Intraday Rally Review

The decline to the October 6th low fits better as an impulse. Then the rally and another decline can give us a zigzag correction, but the ending “C” wave is rather short. I like to see deeper “C” waves, but then we have very little room to move lower, before that $1162 support is breached. I can also work this as a new set of declining 5 waves, so there could be some strong downside still to come.   Silver also reacted this morning, which has a different wave count than gold. 

From the December 2016 low of $1125, the rally was about as wild and choppy as we want to get which sure looks much like a triangle has completed at the $1355 price level.  Since that $1375 price level has not been exceeded, gold has been in a bearish phase ever since. One good thing is that from that mid, 2016 high, (daily chart) gold displayed a pretty good zigzag crash, which should eventually get completely retraced. 

The SP500 is still heading down as I post so we will find out if investors are going to run to safety in gold. Gold stocks have not really dipped as much as gold has, which is a bullish sign. Some will even suggest that gold stocks will play catch-up, but that has been a false assumption most of the time. 

It may take the rest of this week before we know if more gold bearish moves are coming. 

The latest gold forecast has been for gold to soar between $3000 and $5000 in the coming years, but how many times have we heard these wild forecasts before? Back in the late 70s the $2000 price forecast was constantly used, yet gold has never reached it. 

If the present gold/oil ratio stayed where it is then a $5000 gold forecast would mean a $200 barrel oil price.