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May 8, 2013

Daily Gold Cycle: Hourly Limbo

After gold surged $150 off its crash low, price has been mired between roughly $1440 and $1480 for the last nine sessions.

Gold's Hourly trading range

Given the ageing state of gold's daily cycle... today marks Day 16... a break out of this trading range will tell us whether gold has another high in mind for this cycle or whether the yellow metal is ready to sink into a daily cycle low.

The direction of the break will be crucial to judging the power of gold's new intermediate cycle, as well. A break lower provides gold plenty of time within its normal, 18 to 28-day timing band to dive to a test of the crash low. A break higher, on the other hand, will likely bring a DCL well above the crash low and set gold up to make an attempt at regaining $1524 during the next cycle. A higher resolution will also give mining shares an impetus to distance themselves from their own crash low, perhaps saving them from the ignominy of dropping to a new low as gold finds a cycle low.

 

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