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November 1, 2012

Current Call: Buy Gold

Cycle analysis is currently showing a favorable setup for entering a long gold trade. Over the past three weeks the yellow metal has produced an intermediate-degree decline by forming a weekly swing high, as well as a failed daily cycle. Furthermore, this action has transpired directly within the 18 to 24-week timing band for a weekly cycle low.

Weekly gold cycle chart

While a weekly swing is needed to confirm an intermediate cycle low, we have an early indication the formation of this low is in progress by virtue of the daily view.

Daily gold cycle chart

A cycle downtrend break indicates the daily cycle has already found a low. Since the weekly cycle has already reached the far end of its normal timing band, we are not likely to see another daily cycle down. Therefore, the weekly low should already be behind us. Apart from a potential bottom test, the path should be higher here for gold prices.

 

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