We use cycles to time key turning points in precious metals. The XAU mining index has carried a somewhat consistent 42 to 46-day lineup. The current setup is beginning to favor a bottom in early December.
Prices formed an interim cycle low on the first day of October (day 42). This cycle should fail (left translate) and eventually break the 87.48 pivot. If established, that would support a 6-month low (green boxes) in early December. The severity of the subsequent correction depends on how quickly prices break below the October 87.48 low.
If miners formed interim cycle lows on October 1st, then it stands to reason gold and silver did too. If correct, that implies we are 7-days into a new series that should left translate and then break the October $1465 low. Typically, left translated cycles peak with 12-trading days, so ideally, this rally should fade between now and next Thursday.
In summary, expect more wild swings as gold works its way down into the next 6-month low. A successful trade deal with China could send prices reeling. The COT remains near-term bearish, and our cycle indicator (currently 287) is far from supporting a bottom. Investors should consider being patient and waiting for better opportunities later this year.
AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit https://goldpredict.com/
This article was originally posted on FX Empire
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