XAU: 05/24/2017


The chart above presents the projection of the 18 month wave in terms of the Gold market. It seems evident that there seems to be a much higher probability for advances rather than declines in this precious commodity. The structure suggests that we put in an 18 year cycle low in the Gold market and we are on the verge of a trend cycle to the upside that is likely to exceed everybody’s expectation. The advance should be somewhat analogous to the advance that was witnessed in the 1970s going into the peak at 850 in 1980. The projection that you see in front of you is that of the 18 year cycle rather than the 54 year cycle. We have reason to believe that the upcoming advance is likely to be much more abrupt and destructive to the Global financial system than the advance that was witnessed during the Iraq war and quantitative easing. Speculators are advised to begin accumulating positions in this market for a sizable move to the upside that is likely to be extended. The reason I say extended is not only because of the fact that we have begun a trend cycle (second 18 year of the current 54 year) to the upside but also because the most recent advance from the lows in December was a leading diagonal which typically precede extended moves from an Elliott wave perspective. Let us now take a look at the Elliott wave structure that we are presented with in terms of the XAUUSD currency pair.

XAUUSD - Primary Analysis - May-24 1251 PM (6 hour)

The structure above is as clear as the skies in July. The decline in 2016 was clearly corrective and new highs relative to the 2016 high are almost certain to be realized. The decline was a double zigzag correction typical of wave two corrections. The advance that was seen in 2016 is very analogous to the advance that was witnessed in 1999 however larger in amplitude. This is the initial tip off for us to expect the advances to be  larger than those witnessed in the decade long bull market in precious metals in the 2000s from an amplitude percentage ratio perspective. Our line in the sand is the wave (2) low since a break of it would negate the Elliott wave count presented above. For now it is time to be optimistic about precious metals and pessimistic about global equities for several years to come.


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