Cycle Trading

Gold has formed a weekly swing low.

We really need to see if gold holds above last week’s low in order to confirm this as a weekly swing low for gold. But assuming that the weekly swing low holds, the next task for gold is to break above the declining weekly trend line to confirm a new intermediate cycle.

Monday was day 4 for the daily gold cycle. Gold needs to break above the declining intermediate trend line to confirm that gold has started a new weekly cycle. If gold is turned back by the declining trend line, that will likely extend the intermediate decline.

How the dollar rallies out of its impending daily cycle low will determine whether gold will develop any traction during this new daily cycle.

The dollar is in its timing band to print a daily cycle low. A break above 94.26 forms a daily swing low and likely signals a new daily cycle.

Friday’s close below the lower daily cycle band signaled an end to the dollar’s daily uptrend. If so, then the impending new daily cycle should form as a left translated daily cycle. A left translated cycle formation for the new dollar cycle will likely see gold break above the declining intermediate trend line. Therefore if the dollar fails to close above its upper daily cycle band, once a new daily cycle is confirmed, that will indicate the dollar has started its intermediate cycle decline. Which should lead to a bullish break of the declining weekly trend line for gold.

In The Weekend Report I discuss what the dollar’s decline means in terms of the dollar’s weekly, yearly and 3 year cycle, and what that means for precious metals.

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