Published 11th September 2019

We remain bearish on gold as technical and behavioral evidence signals headwind. The precious metal is likely to correct during the next few months.

Gold and its siblings corrected sharply during the past week. All precious metals probably ended the sharpest portion of their 2019 rally. Gold could unfold another spike to the upside before the rally ends. The last upside sequence counts best as a 3-wave advance and another spike into the yellow area leaves us with a textbook sideways correction within minute wave iv(circle).

The behavioral aspect continues to signal excessive speculation in gold. That situation has not cleared at all even though gold did not make any progress since early August. The sentiment picture rings alarm bells because it forms as gold shows a clear 3-wave upside sequence from the 2015 lows. It is a strong hint that our W-X-Y count is most likely correct.

What has to happen to prove us wrong? The 2011-2015 sequence has to be a 3-wave sequence instead of an impulse. Additionally, a bull market has to start via a leading diagonal. The scenario is not depicted on the charts but has simlar conclusions as the black count for the next few months. It would correct towards 1,300. Last but not least, the bull scenario (not charted) needs a complete game-changer from the fundamental side.

The analysis above is a historical abstract of our Gold Premium Analysis. Subscribers can access multiple timeframes, which are not displayed on this page.