I believe gold is giving us a hard time because it was just in a bear market rally, and not on some other path that has gold prices going to the moon. Gold $1600-$1900 is going to the moon. I have a problem with that as Death Crosses are a serious lagging indicator. It took just about 3 years for the Death Cross to show in this weekly gold chart, which makes the Death Crosses a lagging indicator. Now the Golden Cross has completed a year after a good buying bottom has arrived. This is far too late to be any use to wave analysis as trades should be executed long before them. The 200-50 day moving average only confirms a bear or bullish mood after the fact. The EWP will forecast any impending Death or Golden Crosses, as there seems to be two Death Crosses that show up in a 5 wave decline.
One more gold Death Cross with this weekly chart will happen, even if it takes 6 months. Gold bugs don’t know that gold is in a bearish rally as they force turning a bear market rally into a bull market. Wow, they can make those little numbers and letters fly and turn a choppy rally into a impulse bull market. Nobody knows what a bear market rally is and what has to happen to confirm that a bear rally did happen. Every bear market rally always retraces its entire bullish phase from the point of orgin. This is the gold $1047 price level. I can just hear the shrieks that the gold price would crash, but there is absolutely nothing down at that $1047 price level that supports the end of any bear market. Price never dictates when a bear market comes to an end. It’s the pattern that dictates where any price level can land at, not some preconceived price stopping point.
Nobody knows what wave count that the 2011 gold peak really is, so it’s impossible to figure out what type of bear market we are going to get. I spent the last 10 years trying to figure that out, and found out the hard way, where a Cycle degree wave 3 peak could find a new home. Commodities are “ALL” in the diagonal famaily, while the big stock markets are in the clean version of impulse patterns. Ignoring the 2011 peak is a big mistake as that is where all wave analysts should be counting from.
From the 2011 peak, I’m working a Cycle degree zigzag that will be about the third of the way through this Cycle degree zigzag correction. Gold is going to make some wild moves beyond anything the gold bugs are expecting where as a price free fall could land gold at the $750 price level. Gold $800 is where the real support is as $1047 just doesn’t cut it.
Gold will never protect you in deflation, it can only protect you from inflation, if you buy gold low enough. To say that gold is still going to soar don’t realize a massive capital destructive hurricane is on it’s way. It could erase $100 trillion in world assets. Money distruction on a scale far worse than anything in 2007. Money distruction means deflation, not inflation.
The US dollar is in better shape than the Euro, Japan or China so the US dollar is acting out it’s safe-haven status. Escaping from the Euro destruction will send the USD soaring.
When gold crashes to $800 at least we have one potential base line. From this $750 base, gold would soar once again. It will be at least one degree bigger than what we had. This too will be just another gold bear market rally, but gold could still soar to the $1800 price level first.
I did not fill in any of the little wave positions this time, as I have online records of doing that already. Gold is just a bit more than $200 away from crashing the $1045 price level, which it can do in a blink of an eye. (Silver about $2 away) Nobody tells you that gold crashed $300 back in 2008, so they think it can’t happen again. GDX got crushed in its price, so expect more of the same this time around. All the currencies that support the price of gold are imploding folks, as Death Crosses show up on thier daily charts. If you don’t know how bad a Death Cross can be, then we’re going to find out the hard way. I have some gold stock ETF short positions that I’m holding, so a rapid switch will have to take place when the ETFs hit bottom.
Only those people that are prepared to buy into a bottom, or catch a falling knife will benefit, as the majority of investors will hate gold stocks when they have been fire bombed.