GOLD- has been consolidating since
late August 2011 highs of 1923 spot price.
Prior to this, we saw a 34 month fibonacci time period rally from 680-1900′s over a
5 wave pattern. As we approached those highs I warned my members and the
public of a parabolic blow off top for wave 5 of primary wave 3.
Now, we are not quite but almost at 8 fibonacci months of corrective period and GOLD has taken
a back seat to stocks and other investment options. The press is decidedly
neutral to bearish on GOLD at this time.
This would be typical of a Primary
wave 4 correction where sentiment gets negative but not in a hostile way.
If we look at the pattern of GOLD
since the 2011 highs we can potentially see a 5 wave triangle forming. This
current dip to the low 1600′s would be wave 3 of that triangle, and a
wave 4 bounce up would follow next… followed by a wave 5 dip for the
If this pattern is indeed correct,
then this current pullback we are in is your best opportunity to accumulate
GOLD before a Primary wave 5 up confirms.
I realize I have mentioned 1523 as the
LOW of wave 4, and that is because it is the low. However, wave 4 continues
to consolidate marking time. Usually the lowest point in a 5 wave triangle is
of course the first leg down from the highs of Wave 3. 1523 served that
purpose and so far the wave 3 lows of this 5 wave pattern are around 1620
Bottom Line? We have been in a wave 4
primary correction since August 2011 in GOLD and the price low was already
hit at 1523. What GOLD bulls want to see next is a power
move up toward 1700 or a bit higher near term, followed by a wave 5
pullback… and then a big breakout to the upside.
I remain long term bullish on GOLD
unless this pattern disintegrates, which I do not expect. This is why we are looking for GOLD stocks to bottom soon in
the GDX ETF 43-47 ranges.
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