Gold Miners ETF (GDX)

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Gold Forecast: Gold Working On Key Bottom
By: Jim Curry | May 1, 2022

Recapping Last week

Last week's trading saw Gold once again forming its high in Monday's session, here doing so with the tag of the 1935.50 figure. From there, a sharp decline was seen into Thursday, with the metal dropping all the way down to a low of 1870.90 - before bouncing off the same into Friday's session.

Gold Market, Short-Term

For the very short-term, as mentioned last weekend the next smaller-degree low was due to materialize - and coming from the 10 and 20-day cycles, with the 10-day wave shown again on the chart below:



With the action seen into Thursday/Friday, the probabilities now favor the 10 and 20-day cycles to have bottomed with the decline into the 1870.90 swing low - and with that are heading higher into the new trading week.

In terms of price, due to my rule that a cycle will revert back to a moving average of the same length better than 85% of the time, the odds should favor a rally back to the 10-day moving average, though a push on up to the higher 20-day moving average would be ideal, since the upward phase of the 20-day cycle is also deemed to be in progress.

Gold's Stepped-Back View

From the comments made in past articles, the last peak of significance came from the 72-day cycle for Gold:

From my 3/13/22 article: "With our 72-day 'oversold' indicator spiking below its lower reference line - and price well above the upper 72-day cycle band - this cycle is looking for its next peak to occur at anytime, and may have already formed with last week's tag of the 2078.80 figure. However, that has yet to actually be confirmed - by taking out a key level that we are watching in our Gold Wave Trader report. Once this 72-day wave does top, a decent correction into early-April is expected to play out, one which sees the 72-day moving average and/or lower 72-day cycle band acting as the magnet."

As mentioned back in March, the last key peak was due to materialize, coming from our 72-day time cycle, which is shown again on the chart below:



In terms of time, this 72-day cycle had been projecting weakness into the mid-April timeframe or later. In terms of price - once again following my rule that a cycle will revert back to a moving average of the same length - the favored path called for a drop back to the 72-day moving average and/or the lower 72-day cycle band, each of which has now been achieved with the action into last week.

As mentioned in prior articles, in order to set up the next good buy signal for Gold, I would like to see our 72-day 'oversold' indicator spiking above its upper reference line, in addition to a daily close below our lower 72-day cycle band. Ideally, I would like to see both of these occurring on the same trading day.

With the above said and noted, though we did get a daily close below our 72-day cycle band with the recent action, we have yet to see a spike above the upper 72-day 'oversold' line, something we might expect to see as this 72-day wave troughs.

With our 72-day cycle at or into normal bottoming range, it may well have already seen its anticipated low. However, that is too early to be confirmed, by a key upside reversal number that we are watching - with the precise details always noted in our Gold Wave Trader market report.

Even said, we did take a long position in the GLD into the most recent weakness, with the idea that - whether or not our 72-day wave has already bottomed - a decent short-term rally was set to play out, coming from the aforementioned 10 and 20-day time cycles.

For the mid-term picture, from whatever low that is seen with the 72-day wave, the path is looking for the next upward phase of this cycle to take the metal back above the March highs into the Summer of this year. That move - if seen as expected - should end up topping a larger tracked 310-day cycle, for what is expected to be another good decline phase, playing out into later this year. More as that as we continue to move forward.

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