War Premium and x(I) in GOLD?

This week in a rebuke to the potential expanding diagonal downward in GOLD (see chart at this LINK), Gold futures turned upward and headed higher in what appears to be a war premium. Because we did not make a clear five-waves-down as a diagonal in GOLD, but instead headed higher, the longer-term GOLD count has been revisited.

Gold Futures (GC) - 6 Months - x(I) Count

Because we know GOLD has traded below $35 / oz, then looking at a log chart indicates that perhaps that wave x(I) is the extended wave in GOLD. Certainly, wave (III) takes less time than the x(I) wave. And, in percentage terms, the run-up to $850 from $35 is a greater percentage move than the rise from $250 to $1900 in 2011. So, perhaps we are looking at the classic extended first wave scenario even though the nominal rise in USD terms is technically greater than the rise to $850 in the 1970's.

A further issue is this one. On a monthly chart, GOLD seems to be living to this parallel.

GOLD Futures (GC) - Monthly - Still in Parallel

GOLD hammered out a bottom three times at the $1,680-$1,700 level in 2020-21. Further, it has broken one of the key dashed down trend lines that would have defined a diagonal. So, if the diagonal formally invalidates above the 1,966.1 level, then it might just make that Vth wave higher. Gold has been very choppy, difficult to trade and may now be beginning to get directional again.

So, at this time, the larger Flat wave potential is now the alternate for both Cycle IV and SuperCycle (IV), as shown in red. And, yes, there are lots of ways this market can still pull some tricks: like what if Cycle IV becomes a larger triangle, instead of a diagonal for example? Or, what if Cycle IV becomes an expanded flat?

At any rate, the market has chosen the lower up-sloping parallel trend line to rally on, so that is the line to keep an eye on in the future. In terms of measurements, from the current wave IV location, V = I does not get price over the high. So, one might have to look for V = 0.618 x net[I-through-III], again, that is unless wave IV forms a larger triangle.

Have an excellent rest of the weekend.

TraderJoe