Gold: Will it soon glitter like never before?

 Friends, herein I share my positional view on Gold with various higher timeframe charts. Longer historical data is available in dollar terms. So, I prefer to study gold in dollar terms.

 

Monthly Chart: Time Cycle

This is monthly line chart of Gold since 1970 in dollar terms. By studying data, it seems that wave changes the direction approximately after every 127 bars (periods). The longer cycle in between was also approx. double the regular cycle. The most recent cycle was time correction cycle, ranging from August 2011 till now. Seems that this cycle may end anytime soon near to Jan – Feb 2022. Alternate phase is seen so far, highlighted in following table. 

 

Phase of cycle	Price Behavior
1970 – 1980	Trending phase
1980 – 2001	Sideways phase (Time correction)
2001 – 2011	Trending phase
2011 – till now	Sideways phase (Time correction)
2022 onwards	Possible trending phase

Monthly RSI:

Interesting behavior of RSI is seen since 1970. Whenever RSI has surpassed 50 but failed to surpass 70 zone (overbought zone), it has continued its sideways consolidation. Such 2 instances are highlighted on the chart with number 1&2. 

But whenever RSI has surpassed 50, followed by 70 zone, it has entered decisive rally. Such 3 instances are highlighted by making circles. In the present time, RSI has decisively crossed 70 zone, sustained and forming higher tops higher bottoms (well above 50). Historical data suggest there is bright possibility of rally emerging soon. 

Weekly chart highlighting Patterns:

It’s very clearly seen as curve formation since 2011. As the curve formation is nearing end, price entered symmetrical triangle formation, small corrective pattern. Possible breakout (continuation) is likely in couple of weeks, which is coinciding with all previous views so far. 

 

Weekly Fibonacci Ratio:

 

 

Symmetrical triangle formation is holding well above 38.2% retracement of the last massive incline. 38.2% is considered to be a healthy correction in an ongoing rally, which is happening alongside time correction (symmetrical triangle), confirming minimum possibility of price decline hereon. 

 

Weekly chart with Ichimoku Indicator:

 

 

Ichimoku is a trending indicator. It highlights the present trend, future trend, price action compared to the past and also highlights strength. Price crossed Ichimoku cloud during 2019 and sustained above the same since then. Trend still remains intact. Sideways consolidation since 2021 is forcing Ichimoku lines to juggle, narrowing cloud, which is supporting a directional rally (even symmetrical triangle is suggesting the same) anytime. 

 

Putting it all together:

Monthly time cycle since 1970, relative strength on monthly chart, curve & symmetrical triangle formation on weekly charts with Ichimoku trend confirmation alongside Fibonacci support, all confirm limited downside & potential new bullish rally soon. This time it may rally like never before, considering Equity rally, monetary as well as fiscal situation so far. 

 

Cheers, 
Kunal 

(Kindly note that shared view is on high timeframe charts (mostly monthly and weekly). This helps to understand upcoming cycle / move on longer timeframe.)

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Statutory Disclosure:

Kindly note that this update is only for educational purpose. It is safe to assume that my personal position, my fund's position, and my client's, as well as relative's position, may be open in the counter. Prefer to take the advice of your financial advisor before initiating any position.