In the final months of 2011, the widely watched "gold bull market" started to adopt its name, literally. Meaning, the price action in gold took on the life of a rodeo bull, swinging and bucking wildly in every direction, hurdling off the pundits one by one.
Here's the scene: In early December, gold took the bull by the horns with prices nearing a lofty $1740 per ounce. Three major events were said to keep the hooves firmly planted to the ground:
- Global central banks increasing their purchase of gold bullion
- The same banks decreasing their interest rates paid on "swaps"
- And, the ongoing global economic uncertainty and instability
In the words of one December 6 news source: "A close look at recent developments provides considerable encouragement for gold bulls."
But, just as the mainstream gold bull riders got comfortable in their saddle, the gold market lunged backwards in a whip-lashing reversal. From December 7, gold prices turned down in a violent $200-plus sell off to its lowest level in five months.
Then, just as suddenly -- from its December 29 low, gold whirled around and charged forward in the powerful rally we see today.
Now, while many gold experts were getting their cowboy hats handed to them, EWI's
Metals Specialty Service editor Mike Drakulich maintained a much better grip on the gyrating gold market.
Here, the following
Metals Specialty Service archive shows exactly how it alerted subscribers of the strong probabilities and alternate scenarios in a timely manner:
"Gold now at the most important intermediate term bull/bear juncture in a long while. A large contracting triangle may be under construction. In gold's case, the added difficulty is whether it might be a bullish or bearish triangle. The bearish option would suggest this could be a 'B' wave triangle which eventually leads to a wave 'C' thrust below 1535."
December 12:
"It's a tough call here and for now the bears continue to have their big chance to take prices a lot lower. I think this is a time to remain cautious, let's see if the downside action continues."
Flash ahead: On December 29, gold prices fell below our cited target of 1535. One day later,
Metals Specialty Service's "Daily" update identified the classic traits of an impulsive bullish rally and wrote:
"Bottom line is now I favor at least an important trading low is in, and perhaps a much more important bottom, but as always in a situation like this it's one day at a time. Now with what appears a near-term bullish five-wave rally and prices back above the key 1550-1560 area, at least an important near-term bottom appears to be in place."
What's next for gold? Right now, EWI
Metals Specialty Service keeps a steady eye on gold's price charts, looking for the dominant Elliott wave structure and technical indicators to reveal the depth and duration of the precious metal's next big move.
Metals Specialty Service Editor Mike Drakulich uses the Wave Principle and 30 years of market experience to help you replace the endless market possibilities with higher-confidence probabilities.
Subscribe today to get Mike's expert intraday and daily Elliott wave forecasts complete with key price levels, targets and valuable insights for gold, silver and other major metals.
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