Oil is in the process of forming an intermediate bottom. Oil is probably the biggest market out there in terms of a single commodity. Usually when it puts in an intermediate bottom and rallies strongly from that point, it brings everything with it including other commodities and the stock-market.
Gold has actually formed a swing and since we are also in a timing band for putting in a low in the crb index, the odds are stacked in favour of a c-wave advance from here. Last week I discussed that we would have a d-wave or a b-wave decline in the gold index. As you can see from the december chart below, we retraced below the 1580 mark this week. Personally I think we now have a swing low in place and as long as this number is not penetrated, I believe that we could have a very violent rally out of this bottom. I think the b-wave was when Gold declined to $1535 a few weks ago in the Asian market. A c-wave advance looks like being very well on the cards as the retracement didn´t retrace enough for a d-wave decline to have existed
Gold December Chart
All now rests on the dollar as the dollar is really the spark that moves Gold quickly. The dollar has most recently moved to new high´s. Now a classic topping pattern would now for the dollar to roll over. Once a high is taken out, smart money exits and the dollar starts falling. If the dollar rolls over soon, it will definitely coincide with the c-wave advance in Gold. It will be very hard for Gold to experience a c-wave if the dollar continues to rally.
I expect Gold to penetrate its recent high of over $1900 an ounce quite quickly if we get this advance and I expect Silver to really rocket, back to its high´s back in May June of nearly $50 an ounce.
