Loading ...After breaking through support at $1180 gold has now dropped far enough to test the 61% Fibonacci retracement of the previous C-wave rally. Yes, I have been expecting a move all the way back down to $1050, but it’s entirely possible that the drop may come up $100 short and bottom at $1150 if the CRB is putting in a three year cycle low right here and now.
I believe oil is the key. When it finds its intermediate and yearly cycle bottom the rest of the commodity complex is going to turn back up. And in Elliot wave terms oil has started its fifth wave down.
We’re only days away from a bottom, and it’s even possible the bottom will form exactly on election day like it did in 2012.
The movements in currencies are also connected very strongly with the commodity cycles. Notice in the next chart that the euro is within a whisker of testing its 200 month moving average where it has bottomed twice in the past. Once the euro finds a major cycle bottom the dollar is going to put in a larger degree top.