Gold Market Cycles

The problem with the cycles in the gold market is they are always changing. There are cycle analysts who use fixed time cycles for gold, and I do too to see what it says, but where the price of gold is concerned I do not rely upon results obtained using this method.

With that said, it is as important for readers to see what the cycles in gold are saying, even if they refrain from placing full trust in the results, as it is for myself. The thing is, when peering through the fog with no sense of what lies within it's murky indistinctness, all partial glimpses are at least some help, though none of them provides full and accurate vision.

This is not a statement from me saying that gold is not cyclical in it's nature. I think it is. But the cycles in gold are very numerous and quite complex because each cycle has an effect upon the other cycles, a state usually known as nonlinear dynamic systems or chaos theory.

So let's see what the good old basic gold time cycles look like. I have chosen to not plot cycles of great length here today, though they matter, their lows are indistinct, and I will take the subject of multi year or decade gold on another time. This is about medium term cycles in the main.

I have also chosen to not show 30 odd cycles which I deem (100% subjectively, but based on experience) to be less reliable than the ones I bring here today. But they are in the background tugging and pushing at the cycles I show below. The thing is: gold encloses cycles present in geopolitics, war, bonds, commodities, and fear, together with a few more, all within it's price.

On the whole I present them without comment, except so to explain a peculiar presentation style I use in some cases. I have dated the next turn or points of importance.

The 4 Year Cycle (varies between 3.5 and 4.5 years)

Annual Cycle

Top 25 Time Cycles

Top 10 Time Cycles

Interesting Fibonacci Cycle

This one previously had a loose fit for several turns, so it has not a good record so far. but it could be strengthening. The last couple of turns were tight, and both were major turns, and so the next one therefore requires watching.

Not a Cycle - A Rhythm

This is more about the "form" of the current gold bear, than the passage of time between swings.

For the recent/current bear market in gold each downtrend line has "contained" rallies until certain criteria were present. One is that the previous trendline which was under price had received two taps to confirm it's ability to provide lasting  support. After the second probe and rebound gold was capable to penetrate the overhead trendline and proceed to the next phase of the bear.

Each of the bear market phases are shaded in colours to clarify. We are in the blue, for a second time, because upon the second tap last time gold fell through the underlying support (into the green). Well gold has regained the blue once more. It is not clear if this is the second of a new double tap, or if the first tap is taking the form of a mini triple tap!

I give two dates in this chart. They are simple anniversaries of the entry and exit from the blue on previous occasions, which may matter in regard to the next occurrence. But it may well be that they will not matter. Either way I will pay great attention at those points which are still to come in regard to the status of the old bear, or new bull whichever it happens to be.

My thinking on this difficult facet of the aging bear is that this time once will be enough, but we must wait and see about that. What I think is my thoughts, it is what gold does that matters most.

So I am watching and waiting on this.

But take note, the blue is a wide zone as by now the trendlines have opened up a considerable gap between them. If gold finds support and completes a successful "double tap" upon the declining support, then there is room for a large rally to the upper regions of "the blue". Until then the absolute levels of both "blue" trendline boundaries continue to decline a little every day, as they should, because despite bullish calls from the PM fraternity, and despite my purchases in June and December last, the bear has not yet been proved to be dead.

Gold cross vs Sterling

Cycles nested within bigger cycles ..... and with them a date mid September which may bring important events in gold for UK based readers.

No straight answers, just the usual couple of hints. There are no easy signals. The best ones are all full of fear when the time comes to trade. the easy signal has already been discounted and is already in the price, and the market will move against you if or when you take that signal. Take care with simplistic promises from wherever they come. Things are still in the balance, though late-ish in the bear. (Things are always in the balance on some timeframe or other) There have been longer bear markets, so be neither optimistic nor pessimistic, just be realistic and accept that it feels uncomfortable. The gold bear has become a performance measurement and evaluation exercise. We must observe the little things carefully.

I still think we are building a base, maybe 2/3rds of the way built now. Bases have multiple lows. I accept that and wish to take all the lows which are significant and will continue to try to identify those from the smaller breaks as they stream in.

This is for discussion or entertainment purposes only, and not investment advice.

Argentus Maximus

The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmNPrice.

42 Comments

Occasnltrvlr's picture

Could it be?

Occasnltrvlr is most firstly!!

treefrog's picture

tooth!

cycles -  i once was asked on a test to define "cycle."  my definition was "any process that repeats itself."  this covers any cycle except a bicycle.

personally, i think lance anderson was treated shabbily.   he won the tour de france while he was on drugs.  when i was on drugs, i couldn't even find my bicycle.

Dagney Taggart's picture

ThankYouThankYouThankYouThankYouArgentus

I was getting ill from the Bergdahl comedy show.

Thanks for the article and back to business:

argentus maximus's picture

An interesting point that

An interesting point that came up while writing this contribution: the geopolitical peak in mid and late June does not turn up in the work based upon the gold price itself. The price of gold seems to prefer July for it's next main event. Could it be that when the next power play, invasion or whatever occurs, the gold market will simply yawn, go back to sleep, and await more important news?

Dagney Taggart's picture

In my opinion, Argentus

The prices of gold and silver have been coiling for the "event" you speak of. The "event" will be what's blamed for the chaotic uncoiling we've been anticipating and those who actually created the coil or the "event" will walk away clean. How many times do we have to see this play out?

Occasnltrvlr's picture

I Try To...

...Walk away clean whenever I create a coil.  Plays out pretty often.

Safety Dan's picture

AM, thank you for this

AM, thank you for this indepth study of the gold cycles. I've been working on retracement or regression patterns in gold; helpful for finding bottoms and turning points of gold. I can use your information to compare my findings. Let's see what develops.. Again, great work my friend!

pm_newbie's picture

Bo Polngy

been following Bo's work of late... so this is another very helpful perspective. much thanks. great post.

silverwhere's picture

two great interviews in this one hour audio

Chris Waltzek, GoldSeek.com radio, posted two great interviews in a one hour combo today.

7:50 - David Gurwitz, Managing Director at Charles Nenner Research, covers the current cycles & patterns. Very very informative discussion (might be right up your alley am).

35:40 – James Turk (one of my go-to physical guys since 2005) covers everything else under our golden sun, lol.

Both segments contain some very pertinent points. (However, the repeated rounds of Robert Ian at the end of this recording were akin to three years of silver torture).

http://news.goldseek.com/radio/1402286400.php

mel's picture

argentus maximus..

Your contributions on this site are.........OUTSTANDING!  ...Thank  you..

DeaconBenjamin's picture

Alasdair Macleod: All You Need To Know About Negative Interest

Deaglán's picture

37%

In the David Morgan video above from last January he sees silver at 32 dollars by the end of 2014. A 37% rise between then and now. Doubtful

Dagney Taggart's picture

@Deaglan

It seems to me that the last thing the market would expect is a rapid squeeze to 32. A move to the 18s was doubtful too but it happened ........ three times in the last year.

Deaglán's picture

Yeah true

I´d be delighted if he were right but over the last year how many things have happened where one would expect a boost in metals prices and the opposite happened. He mentioned not just people on the sidelines coming back in but also new investors potentially entering the market. I guess anything like a rise to 32 would attract plenty.

atarangi's picture

The holiday in France

Mom and Dad take their 6-year old son to a nude beach. As the boy walks along the sand, he notices that many of the women have boobs bigger than his mother's, so he goes back to ask her why. She tells her son, "The bigger they are, the sillier the lady is." The boy, pleased with the answer, goes to play in the ocean but returns to tell his mother that many of the men have larger things than his dad does. She replies, "The bigger THEY are, the dumber the man is." Again satisfied with her answer, the boy goes back to the ocean to play. Shortly thereafter, the boy returns again, and promptly tells his mother: "Daddy is talking to the silliest lady on the beach, and the longer he talks, the dumber he gets."                                                                                              

AlienEyes's picture

A canadian wrote....

"I was getting ill from the Bergdahl comedy show.I was getting ill from the Bergdahl comedy show."

Canadians are famous for their total inability to understand US politics. It's all they can manage to mimic the UK with a weak "monkey see, monkey do." When left on their own, they are perfectly happy to club baby seals to death while munching on whale blubber.

smiley

hindsight101's picture

What a move to $32 would look like

http://stockcharts.com/h-sc/ui?s=$SILVER&p=D&st=2012-06-09&en=today&id=p88969160070&a=354560639&listNum=1

After the suppression we've been through I feel it rather imaginary to think such a rally would occur unless there is a sudden shift in speculative interest which presently is quite negative....Maybe that is the surprise that awaits...

Unholy Dalliance's picture

Unnatural Trading in silver

I don't post comments very often on TFMR (or anywhere else, for that matter) but having watched silver's 'peculiar' trading over the last weeks, months and, possibly, now stretching into years, prompts me to record what I think is happening.

It's quite simple: there are few to no buyers of futures or options for futures on either the London or the New York exchanges. My feeling is all trading is being ACTIVELY discouraged as the bullion banks DAREN'T issue any more paper sales. They will be bought by those who are accumulating physical silver who will then stand for delivery! Therefore, I think they are applying pressure in whatever way they apply pressure to dissuade traditional market participants from participating. It is that simple.

This would then explain the riduculously small trading ranges we see each and every day! I challenge anyone to come up with a better idea as this is just not natural.

ivars's picture

Still not getting it: how

Still not getting it: how would remnibi becoming reserve currency along with USD could negatively affect USD value vs. gold. 

Because that is ( shared reserve currencies) what seems to be starting to happen. EUR can not be considered shared, as it has been so far still dependents on USD ( a.g. because Europes defence depends on the USA). EUR is not sovereign currency as its not protected by military might, so , in the end, it is a derivative of the USD. 

Remnibi is sovereign currency, becoming, on its track to become second world reserve currency vs. or along ( taking some market share, obvously) from USD /EUR block. 

Remnibi does not need gold backing, China economy and military is enough, plus some countries resources ( like Russia, Central Asia ) that might become part of currency block. 

So ..why would remnibi becoming reserve currency to take part in further debt expansion and unload USD from this function a bit be USD negative vs. gold? I do not get it.  

Green Lantern's picture

One could look at all the

One could look at all the articles coming out, including the recent one by Zerohedge, on the remnibi as the new world currency as a planted fear mongering meme by the IMF.  Especially if you read all the IMF papers and academic papers sponsored by the western led IMF on the China Yuan becoming the mainstay of  new reserve currency there might be that element of purposeful disinformation.  Russia also calling on China to be the new world currency. 

Why the heck would IMF put out so much on this new reserve currency in the hands of a communist power?  Of course, it could be a tactic for us to accept a more modest compromise, and alternative to the SDR or some combination of currencies  ie a currency basket.  

If you follow the reports, the combinations being suggested keep vacillating.  yuan-ruble-euro, or yuan-ruble-deutschmark etc...

Of course, any of the above variants is entirely dependent on everything going according to plan.

ivars's picture

Quote:Why the heck would IMF

Quote:
Why the heck would IMF put out so much on this new reserve currency in the hands of a communist power?

To prolong debt expansion cycle. USD/EUR can not handle it anymore. You can not get anymore a positive return- globally- by issuing debt in USD or EUR. Returns are below transaction costs, so deflation is there, and with that- negative interest rates, and with that- contraction of money supply. Prolonging GLOBAL debt expansion cycle is THE ultimate goal of bankers and those who feed on money supply growth, inflation, interest rates. There will be many supporters - including debtors. To sustain current system, there is no other choice. And remnibi is only money available for the role of further debt expansion without losing its value, and not without preplanned intent ( think Honk Kong and how it was returned to China in 1984 ( agreement between Thatcher and Den).  

The alternative is exponential ( at first slow)  contraction of world economy and population. I think that will be delayed until the last moment, as usual. Especially democracies can not afford it, as democratic values are consequences of getting drunk with ever increasing money supply and debt, living in the future. And contraction will push all democratic regimes in trash bins as other values will become more important. . The game will be played until the first blink. Then race to bottom will follow. China is only way to save the system, communist or other ideology are sub ordinate to money supply expansion goal- more so that China has engaged in it happily since it opened internal debt market and itself in desperate need to grow them more. 

China needs to become banker to the world as USA did ( and Britain before) to maintain  the benefits of growth from first becoming world producer. Capital is there. It needs to be lent on favorable terms, in exchange for control and profiting from mere printing. That means becoming reserve currency. 

This mega cycle is one that no one wants to end to early:

Ned Braden's picture

For what it's worth....

This week, Friday is: A Full Moon AND Friday the 13th

Just sayin

ivars's picture

Besides, you know my theory.

Besides, you know my theory. So far since WWI-WWII money supply was controlled by Rocks. Now Roths want to be back in driving seat as well. The moment is ripe. Roth has always loved more controlled political systems then Rocks, as they think democracy is too expensive ( which it is). So there is no ideological problem at all. From one side, there is inability to continue, from other, willingness to participate, from both- understanding that money supply ( debt) must expand for both to remain relevant. Perfect match. 

Dagney Taggart's picture

You're right, alien

I don't understand US politics. Who does? You? That's something to be proud of!

So what do you have to show for your politics besides a nation of war chimps who destroy everything they touch, bankrupting themselves chasing after shadows, and leaving behind a debt that cannot be repaid on the heads of the unborn?

I'm sure the children and grandchildren are deep-down so very impressed with their elders.

Why don't we just leave it at that because I don't want any more war chimp Americans to embarrass themselves more than they already have and Argentus' thread to morph into another Bergdahl comedy show.

Good day. I need to get ready to go be productive today instead of destroying for a living.

Green Lantern's picture

Well, Ivars you brought your

Well, Ivars you brought your own line of thinking to completion all on your own.  I guess you easily dismissed that the information coming out being published in the alternative media and discussed among metal analysts was information put into form by the IMF.    They have no stake in controlling our discussions by feeding the memes, namely new currency systems.  

So I'll veer off topic just a bit now that's settled.  The great thing about AM's posts are that they are so well done, there is usually not much room for debate until the next blog happens on geopolitical realities when there is plenty of room for polar arguments.    

Much of what we are focused on is the degradation of current systems, governments reactions and potential transitions.  Less often do we focus on potential optimistic consequences of this evolvement and memes that are emerging that show we are moving into a new paradigm.   In Rushkoff's examples, it's local economies and alternatives to fiat.  Real life examples and not philosophy.

Douglas Rushkoff might be a  too optimistic for your taste. I've posted his work a few times in the last couple of years, but no harm in revisiting in light of his new works. 

He is a keen observer of trends, history, behavior and yes does see endings of all sorts on the horizon.  However, his take is a bit more optimistic, or you might say fantasy.  And that's fine too.  None the less, interesting to consider even for a moment.  

The two video's are a brief introduction by the author based on his book Life Inc., a bit about the history of fiat systems, how the industrial revolution got started and crisis as opportunity for wholesale change.  When we say "the system" it refers to corporatism that begun in the middle ages but was not always the fare of the day.  


 

And another great article on what we need the most is -not jobs.  Philosophical in bent but an interesting perspective

I was having a conversation with a group of artisans who make their living producing musical instrument that is now slowly being made on 3-D printing.  Although the cost is prohibitive still for most individual artisans, people have started sourcing it out.  The product is still a bit klunky and the material not to people's likings yet.  But like personal computers and cell phones, these technological advances grow expotentially and usually very quickly.   whether they like it or not 3-d printing is here to stay and this is going to effect our economy in profound ways when one machine replaces scores of manufacturing workers.  

However, Rushkoff points out that maybe it's not job, or growth that we need in this digital age, but something much more beneficial to society.  

http://www.rushkoff.com/blog/2011/9/7/cnncom-are-jobs-obsolete.htmlhttp://www.rushkoff.com/blog/2011/9/7/cnncom-are-jobs-obsolete.html

And one more from Ted.   A Harvard Graduate whose cosmetic printer seeks to put out of business the entire cosmetic industry now that a woman can print make up at home.   

Maybe Rushkoff has a point that while corporate structures have reached the end of their growth curve, that instead of looking for a saving grace in a new world currency or China, it will come from the shift of corporations as the ultimate producers back to the individual.  Maybe, maybe not.

Yeah, I know 3 video's and an article.  Too much homework. 

Dagney Taggart's picture

@GL and ivars

Could the same people who control the renminbi also control the SDR and this is just them presenting us another illusion of choice?

And since when has the IMF ever been anti-communist, GL?

@ivars: Do you think the rest of the world will accept USD part 2 in the form of the illusions of Chinese "economy and military" being enough to back the world reserve currency again? Do you think enough trust remains and lessons unlearned to repeat the same mistake?

Gold keeps everyone honest and allows one to withdraw consent at any time. Who doesn't want that sort of flexibility now for the foreseeable future?

metalsbyamile's picture

More and more are joining

Charles Nenner call for July bottoms. For what ever reasons.

None the less he has been saying it for 18 months.

Welcome aboard to all the nay sayers!

(We who ascribe to cyclical timing of things had better be correct or we will never hear the end of it from Hatter)

Green Lantern's picture

And since when has the IMF

And since when has the IMF ever been anti-communist, GL?

Only in it's own form of propaganda. Communism does not exist. IMF is an imperialist organization by nature. If you followed my line of thinking, they'll not allow Ivars theory to come into form and they'll use the anti-communist meme to allow it to get it's way.

China is certainly being offered a ring of power by the banksters but not the ring to rule all things. What I see as a possiblity of playing out is the building of a polar argument and Obama coming on the tely saying, we the US cannot allow China, the great communist power to rule the world. As American's everywhere raise their fists and say yeah, yeah. I have a better idea, he'll say, and bring us into a soft landing of a new basket of currencies that suit the American psyche better.

The banksters need a new host. To make it palatable to the rest of the world it will be nominally attached to gold (whose inventory the banksters will be entrusted with)

The communist meme will be used.

metalsbyamile's picture

Then there were 3

USD Euro Remnibi

How about the USD, on a tear. Another correct call from another great service.

Green Lantern's picture

(We who ascribe to cyclical

(We who ascribe to cyclical timing of things had better be correct or we will never hear the end of it from Hatter)

The sticks are not to be blamed for poor calls.  It's all in the person who knows how to read them. 

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