Mixed Messages In Metals
By
Avi Gilburt
As has been the case for the last year, the gold structure is the nicest one we are tracking right now. The move off the wave 4 support box on GLD has now provided us with a relatively reasonable 5-wave rally structure. Therefore, I am counting that as wave [1] of 5 of c of [iii], which you can see most clearly from the attached 60-minute chart. This suggests that we should see a pullback in the coming days.
However, silver is still being a problem child. The rally off the last pivot can still be considered an a-b-c corrective rally (with a top being struck today at the a=c point) and be counted as the alt 2, as shown on the 8-minute silver chart. So, I still cannot discount the potential for the yellow count to take us down to the 26-27 region to complete a larger degree 2nd wave. However, as long as we remain over the 30.34 level, I am going to give the bulls the benefit of the doubt, especially considering the gold pattern.
However, I cannot say that I have a confident bullish count upon which to rely, as I am tracking several that can potentially play out over the 30.34 support.
GDX is in between the silver and gold chart. I can also count 5 waves up in GDX off the recent low, but the 5th wave is quite large in that structure. But, for now, this is the count I am going to be using as my primary. Therefore, it means I am looking for a 2nd wave pullback in GDX as well.
In both gold and GDX, should we get that 2nd wave pullback in the coming days, and then break back out over the high we strike in this rally (which may be in place already), then that will likely trigger the next bigger move higher in both those charts.
How silver plays out in the more immediate bullish path is still a bit of a question to me, and I will need a bit more information before I can nail the micro-count down on that chart.
At the end of the day, I want everyone to continue to focus on the bigger picture in the metals complex which strongly suggests that we have much higher to go before this bull-trend completes. While all good thigs must come to an end, and that applies to this bullish action in metals, I still think there is more to be seen on the upside across the complex over the coming 12-18 months. However, there will still be several segments of weakness we will likely see along the way before it does complete.
