Gold count # 1: Lehman-crisis low in October 2008 at 681$. Assumption 1: At this low the actual monthly uptrend started in October 2008. Counting now the months from October 2008 to May 2013 we see that gold is actually in the 56th month of the bull-run. In the 55th month of the bull-run at 1321.50$ the price low of the correction in the uptrend was reached in April 2013. 55 is a Fibonacci number. The April 2013 low is suggesting itself as to be the final price low of this correction. Consequently gold may rise for 3, 5 or even for as many as 8 consecutive months.

Gold count # 2: Lehman-crisis low in October 2008 at 681$. Assumption2: Not before the absolute November low of 2008, at 698.20$ on 11/13/2008, after the low of October 2008 was tested successfully, the actual bull-run started. If we count now the months from November 2008 to May 2013 we’ll see that gold is actually in the 55th month of the bull-run. 55 is a Fibonacci number.

If May 2013 achieves to produce a higher monthly low than April 2013 AND May is able to close ABOVE 1422 the April 2013 low (54th month of the uptrend) will be very likely the final price low of this correction cause the 55th month succeeds in producing a higher low developing a new up-impulse based on the low of the 55th month of the uptrend. Of course: This count also allows gold to go lower than the April low, in May 2013 – much lower…  

 

 

Gold count # 3: All-time high in September 2011 at 1923.70$. In September 2011 the gold correction started = month # 1 of the correction. Accordingly with May 2013 gold is in the 21st month of the correction – a Fibonacci number. May 2013 is extremely important pointing the way ahead!

May 2013 is either the 55th or the 56th month of the current bull-run. At any rate it’s the 21st month of the correction.

So, from the Fibonacci count gold is situated shortly before an important change, depending on May’s performance.

Concretely the potential change can only turn out like this. There are three scenarios. A) The 21st month of the correction makes a lower low again, i.e. in May it is newly going beneath the 1321.50$. If another sell-off wave wants to occur it may go down harshly again, maybe down to the 1140$-1040$ zone. B) May produces only a minimally lower low than the April low.

Or C) in the 21st month of the correction gold makes a higher low resulting this "successful test" of the April low (20th correction month) in the 21st month of the correction into the upwards turn. In this case, gold would have to force itself at least to a 2-3 month up-move.

Option C) seems to me absolutely sympathetic!! I.e. it’s actually the most likely possibility, the probability is above a 70%! But the market will have to decide now. For from next week, from Monday May 6, 2013 to the end of the month, 05/31, gold will be situated in the new absolutely dangerous sell-off mode  

 

 

There is nothing else to be analyzed. With coming Monday gold will trade again at the most important and most dominating weekly resistance area: The brutal resistance of the 4th double arc in the weekly 13 Candle GUNNER24 Up. This double arc has been pressing down gold since October 2012. Last it was responsible for the greatest gold decline of the last 30 years.

Tomorrow gold will trade within the lines of the 4th after the lower line of the 4th was touched at 1487 on Friday. Thus the 1487 is the combined weekly and monthly resistance. Please mind about that the black diagonal in the monthly 3 candle down setup above. It’s very difficult to overcome. Gold may thoroughly be slowed down by the 1487 for 1-2 weeks. With the Friday high at 1487 a new hefty decline on daily base may have begun…

Any possible coming decline in the daily time frame is supposed to end at the actually strongest monthly support, at 1422, the center of the just passed square in the monthly 3 candle down setup. From there should have to target the 1487 again or perhaps even the 1522-1524.

By and large I expect the 1487 to be taken upwards during the next 1-3 weeks targeting gold the upper line of the 4th between May 24 and 31. I’m getting to this assessment since in 2013 gold has managed twice to work its way forward from the lower to the upper line of the 4th as soon as it was quoted between both lines of the 4th. Apparently the space between the lower and the upper lines of the 4th is providing unambiguous support.

There, at the upper line of the 4th the next hefty sell-off move on weekly basis is pending, as I see it. The upper line of the 4th is clearly a stronger resistance than the lower line of the 4th is. The last two sell-off moves could not start before gold touched the upper line of the 4th. It would be virtually classical if gold – and it’s supposed to - reached the new monster resistance-horizontal at 1522-1524 being willing then in the further course to follow the down-course of the 4th downwards again. It would be a classical back-test of the former consolidation lows including the consecutive sell-off. So to speak it’s the classical Kiss of Death. This scenario may happen like this, but generally the space between both lines of the 4th is any time able to release a hefty, brutal sell-off. Just like it did in the recent past:

 

 

Gold has got muddled in a highly volatile situation. Simply in the weekly time frame a number above average of important magnets have emerged that can be headed for by gold any time it wants to rebound from another important magnet.

Above the actual – not so strong – 1487 monthly resistance the weekly 2010 Resistance Angle is lying. This one is technically strong enough to disable gold to break it in the first or second attempt. It’s situated at 1497 for next week. Above the 1497 there is a recognizable resistance Gann Angle Magnet at 1505. It might be worked off by the candle after next.

If gold really achieves the 1500-1505 on daily base the 1522-1524 monthly resistance will be most likely to be reached. From there – bang – downwards!!!!!

Only in case the 1522-1524 will be overcome by 3 consecutive weekly closings we’ll have the confirmation that gold will possibly want to go up for 5 consecutive months.

Above there are some monster resistances that are supposed to reject gold any time. It’s going to be a tough fight working its way up there. And… at any time there will be the threat that anyone of those resistances may chase gold down harshly and deeply!

Underneath the price the 2012 Support Gann Angle has turned out to be a clear backing. The 2012 Support Gann Angle arose at the year-high 2012, 1798.10$ on October 1, 2012 having delayed the decline of the last 8 months again and again. Together with a weekly Support Gann Angle last Wednesday it formed a double Gann Angle Support Magnet chasing gold up to the 1487 monthly resistance. By and large this 2012 Support Gann Angle is likely to depict the maximally possible lows of the next 3 weekly lows. Since the 2012 Support Gann Angle is falling, in each case lower weekly lows will have to be taken into account.

As analyzed already the 1422 is now the strongest monthly support!

Conclusion: For the coming 3-4 weeks gold is rather supported. But high volatility is expected to continue. In each case higher weekly highs but also lower weekly lows will be allowed and expected. Each resistance worked out in the weekly chart may be able to press gold down severely. Upwards there isn’t much space. A tenacious fight will be to be expected at 1487, 1497, 1505. If the respective resistance is taken upwards, from the next higher resistance a hefty decline may start again. The best short-entry with least risk will be at 1522-1524. Minimum target will be 13xx.

Even if May 2013 closes at the highs, in the weekly time frame gold will newly be forced down by the 4th. In June 2013 the 13xx should be on the price board again.

Not before gold closes above 1522-1524 for 3 consecutive weeks we’ll be allowed to reckon with a 5 month rally. Not before that the resistance of the 4th double arc in the weekly time frame will be clearly overcome.

Each monthly close below 1335 will activate the next possible downtarget: 1140-1040.

For the coming weeks, too, gold is going to be an unequivocal trader’s market. Wild and volatile…

 

  

 

 

 

Be prepared!

 

Eduard Altmann