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Gold Cycles Hinting at Significant Low


Today is day #115 in my 5.5-month (122 trading day) cycle in gold, which means that this cycle is 94% complete, based on its starting point of May 16, 2012.

Yes, that certainly suggests that this low-to-low cycle is very mature and could be nearing a significant cycle low due in the next week or two.

The problem is that this week already, spot gold has pressed to, and just beneath, $1700, but has reversed off of that level in what could be a double bottom at $1698.52 on Oct 24 and $1700.68 on Oct 26, right in the timeframe for my 5.5-month cycle bottom. Could such a double bottom represent anything else at this point?

I really don’t know. What I think I do know is that my work back in May-June warned me to expect a cycle low that represented the end of the entire corrective phase off the Sept 2011 high at $1921.50.

As it turned out, the low on May 16, 2012 at $1526.98 took a while to carve out a significant bottom. However, it did lead to a powerful upleg that peaked at $1796.30 on Oct 5, a climb of 17.6%!

The recent Oct 5 high occurred on day #99, or 81% through the entire cycle length, which means that the current cycle has a very constructive "right or bullish translation" that we should expect if, in fact, it is the initiation of new bull leg within the longer-term bull market for gold.

The bottom line is I think we have to start a new long model portfolio position in the SPDR Gold Shares (GLD) now, because I cannot afford to ignore this week's potential double bottom in and around $1700 within a 5.5-month cycle that is 94% complete.

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