Futures OroLong
Gold Seasonality In Sync with Wave 2, Silver Has More Potential
Gold and silver typically follow similar patterns, and now is no exception. While I usually prefer to trade gold because of its greater liquidity, I believe silver currently looks more attractive because it has retraced almost twice as much as gold. Its seasonal annualized return at this time is 100% greater, which makes sense with silver's greater retracement. I have analyzed both metals and copied/pasted the analysis for each idea while only changing the information that differs because their current technical and seasonal patterns are almost the same. You can find the silver idea here:
Gold should have completed a five wave move down on Friday; if not, it should complete the down move on Monday or Tuesday. The Elliot wave pattern coincides with one of gold's most bullish seasonal patterns.
Over the past 54 years, gold has experienced some of its most significant annual gains between July 18 and September 22. If you bought and sold gold at these times every year over the past 54 years, you would have made a profit of 62.69% of the years with an annualized return of 16.49%. These are outstanding results for a trade window of only 6.5 weeks.
The results are even better if we restrict our seasonality research to the most recent 10 years. Over the past 10 years, gold has experienced some of its most significant annual gains between July 18 and August 28. The win rate of this period is 60%, with an annualized return of 40.40%.
Gold has retraced 18.05% over the past four months and has an oversold RSI reading below 30. This is also happening at a pivotal time in gold's Elliott wave structure due to moving from intermediate wave 1 to intermediate wave 2.
Over the next 5-6.5 weeks, gold should rise to somewhere between $1841.6-$1996.7 (between the 0.382 and 0.786 Fibonacci levels). I have marked three vertical lines on the chart. The green line is when gold starts its historical bullish seasonal pattern. The first red line is when gold has ended its bullish seasonality over the past 10 years. The second red line is when gold has finished its bullish seasonality over the past 54 years. The red boxes between the horizontal Fibonacci levels and the vertical seasonality lines represent the approximate profit-taking zone.
It's worth noting that while market seasonality can be very useful, there is no theoretical reason why it should repeat. Whereas there are theoretical reasons why Elliot waves exist and why oversold markets correct. Seasonality gives us a higher probability of making a profitable trade, but we must still watch the developing market structure rather than blindly following statistical patterns. We should get out when the market retraces a clear Elliot pattern and gold is no longer oversold, regardless of the price level. Potential is good.
Gold should have completed a five wave move down on Friday; if not, it should complete the down move on Monday or Tuesday. The Elliot wave pattern coincides with one of gold's most bullish seasonal patterns.
Over the past 54 years, gold has experienced some of its most significant annual gains between July 18 and September 22. If you bought and sold gold at these times every year over the past 54 years, you would have made a profit of 62.69% of the years with an annualized return of 16.49%. These are outstanding results for a trade window of only 6.5 weeks.
The results are even better if we restrict our seasonality research to the most recent 10 years. Over the past 10 years, gold has experienced some of its most significant annual gains between July 18 and August 28. The win rate of this period is 60%, with an annualized return of 40.40%.
Gold has retraced 18.05% over the past four months and has an oversold RSI reading below 30. This is also happening at a pivotal time in gold's Elliott wave structure due to moving from intermediate wave 1 to intermediate wave 2.
Over the next 5-6.5 weeks, gold should rise to somewhere between $1841.6-$1996.7 (between the 0.382 and 0.786 Fibonacci levels). I have marked three vertical lines on the chart. The green line is when gold starts its historical bullish seasonal pattern. The first red line is when gold has ended its bullish seasonality over the past 10 years. The second red line is when gold has finished its bullish seasonality over the past 54 years. The red boxes between the horizontal Fibonacci levels and the vertical seasonality lines represent the approximate profit-taking zone.
It's worth noting that while market seasonality can be very useful, there is no theoretical reason why it should repeat. Whereas there are theoretical reasons why Elliot waves exist and why oversold markets correct. Seasonality gives us a higher probability of making a profitable trade, but we must still watch the developing market structure rather than blindly following statistical patterns. We should get out when the market retraces a clear Elliot pattern and gold is no longer oversold, regardless of the price level. Potential is good.
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