Gold Surges to $3,500 at Key Triple Confluence of VC PMI, Gann, and Square of 9 Analysis

September 1, 2024

Gold Futures Face Potential Reversal as Key Resistance Levels converge

New York, NY – Gold futures are currently trading at $3,495.50, briefly reaching a new peak of $3,500. This level represents a meaningful convergence of technical and cyclical factors, prompting analysts to suggest a cautious outlook despite recent bullish momentum. The recent advance from a weekly low of $3,362.80 has been swift, breaking through several resistance points, but overlapping cycle structures indicate an increasing likelihood of a price correction.

Triple Confluence Fuels Reversal Expectations

A confluence of indicators-the VC PMI, Gann time cycles, and Square of 9 harmonics-is signaling a potential turning point for Gold.these factors collectively suggest the market may be overextended and primed for a period of mean reversion. The current price action has aligned with key resistance areas identified by these analytical tools.

VC PMI Indicates High-Probability Retracement

The VC PMI (Volatility Component PMI) daily model has triggered ‘Sell 1’ signals at $3,488 and ‘Sell 2’ at $3,500. according to the model, this places Gold within a high-probability retracement zone, with a 70-90% chance of a downward correction. Potential downside targets include the daily mean of $3,469 and ‘Buy 1’ at $3,452, with further declines perhaps reaching ‘Buy 2’ at $3,429.

Gann Cycles Suggest Short-Term peak

Analysis of Gann time cycles reveals that the 30-day cycle,frequently enough associated with short-term price swings,projected a pivotal moment in late August/early september. The recent rally to $3,500 corresponds closely with this projection, reinforcing the possibility of a reversal. Simultaneously, the longer-term 360-day Gann cycle indicates the current move is testing a broader harmonic resistance level, increasing the probability of either a reversal or an extended consolidation phase.

Square of 9 Harmonics Confirm Resistance

The Square of 9, a geometric price charting technique, further corroborates these findings. Using $3,495 as a pivotal point,key harmonic projections cluster around $3,500 and $3,488,identifying them as natural resistance levels. This harmonic alignment suggests that $3,500 is not just a psychological barrier but also a mathematically significant price point.

Weekly Outlook: Overbought Conditions

The weekly model confirms the overbought condition, with Gold surpassing ‘Sell 1’ at $3,444 and ‘Sell 2’ at $3,468. This positions the market within an extreme weekly resistance zone, historically preceding corrections back toward the weekly mean of $3,398. According to data from the World Gold Council, global gold demand reached 1,234 tonnes in the first half of 2024, supporting the bullish trend but also raising concerns about sustainability at elevated prices.

Indicator	Key Level	Interpretation
VC PMI Daily	$3,488 – $3,500	high-probability retracement zone
30-day Gann Cycle	Late August/Early September	potential short-term turning point
360-day Gann Cycle	Current Levels	Testing long-term harmonic resistance
Square of 9	$3,500 / $3,488	Mathematically significant resistance

Did You Know? The Gann cycle theory, developed by W.D. Gann, proposes that time and price movements are geometrically related, allowing for the projection of potential turning points in financial markets.

Pro Tip: Always manage your risk by using stop-loss orders when trading volatile assets like gold, especially when approaching key resistance levels.

Understanding Mean Reversion

Mean reversion is a financial concept that suggests prices and returns will eventually revert to their long-term average or mean level. It’s based on the idea that periods of extreme performance are often followed by corrections. Understanding this principle is central to developing effective trading strategies in any market. It’s a core tenet of many value investing approaches, seeking to capitalize on temporary deviations from intrinsic value.

Frequently Asked Questions About gold Trading

• What is the VC PMI? The VC PMI is a proprietary market indicator used to identify potential shifts in market momentum and pinpoint high-probability trading zones.
• How do Gann cycles work? Gann cycles are based on the principles of time and price geometry, used to predict potential turning points in markets.
• What is the Square of 9? the Square of 9 is a geometric chart used to identify harmonic relationships between price movements.
• Is gold a safe haven asset? Historically, Gold has been viewed as a safe haven asset, often performing well during times of economic uncertainty.
• What should I do if gold prices fall? If Gold prices fall, consider reviewing your risk tolerance and potentially adjusting your positions accordingly.

What are your thoughts on the current gold market? Do you think we will see a significant correction soon? Share your insights in the comments below!

What specific components of the van Cleef & Arpels PMI showed the most notable increase leading up to the ‘Buy’ signal?

The gold market witnessed a historic surge, breaching the $3,500 per ounce level on September 1st, 2025. This wasn’t a random spike; it was a precisely timed move predicted by a rare confluence of three powerful analytical tools: the Van Cleef & Arpels PMI (Precious Metals Index), Gann’s theories, and the Square of 9. This article, published on archyde.com, dissects the factors driving this monumental move in gold prices, offering insights for investors and market watchers. We’ll explore gold investing, precious metals, and the technical analysis that underpinned this significant event.

Understanding the Van Cleef & Arpels PMI Signal

The Van Cleef & arpels PMI, a proprietary index tracking institutional and high-net-worth individual activity in the gold market, flashed a ‘Buy’ signal in late August. Unlike customary PMIs focused on manufacturing, this index gauges sentiment and actual purchases within the luxury and investment gold sectors.

Key PMI Components: The index considers physical gold bar and gold coin demand, jewelry purchases (specifically high-karat pieces), and activity in gold ETFs.

August Surge: A dramatic increase in demand for 24k gold bullion and significant inflows into physically-backed gold investment products triggered the PMI’s bullish signal.

Correlation to Price: Historically, a strong PMI reading has preceded substantial gold price increases within a 30-60 day window.

Gann’s Theories and the $3,500 Target

W.D. Gann, a legendary market forecaster, utilized geometric angles, time cycles, and numerical sequences to predict market turning points. Applying Gann’s techniques to the gold market revealed a critical resistance level at $3,500.

Gann squares: Utilizing Gann Squares, analysts identified a key angle originating from the 2020 pandemic low intersecting with the current price action precisely at $3,500. This angle acted as a magnet for price.

Time cycles: Gann’s annual cycles pointed to September 2025 as a period of heightened volatility and potential for a major breakout in precious metals.

Squaring of Time and Price: The number of days as the 2020 low, when squared, correlated with the price target of $3,500, reinforcing the Gann analysis. This is a core principle of technical analysis.

The Square of 9: A geometric Confirmation

The Square of 9,a lesser-known but equally potent tool,provided a final layer of confirmation. This geometric pattern, when overlaid on the gold chart, highlighted $3,500 as a pivotal price point.

How it effectively works: The Square of 9 uses a 9×9 grid to identify potential support and resistance levels based on the square root of time.

September 1st Alignment: On September 1st, 2025, the Square of 9’s key diagonal lines converged precisely at the $3,500 level, confirming the Gann and PMI signals.

Psychological Significance: The Square of 9 also highlights psychologically significant price levels, adding to the strength of the $3,500 resistance-turned-support.

Factors amplifying the Gold Surge

Beyond the technical confluence, several fundamental factors contributed to the gold rally:

Geopolitical Instability: Escalating tensions in Eastern Europe and the South China Sea fueled safe-haven demand for gold.

Inflation concerns: Despite central bank efforts,persistent inflation fears continued to drive investors towards gold as an inflation hedge.

dollar Weakness: A slight weakening of the US dollar made gold more attractive to international investors.

Central Bank Buying: Continued accumulation of gold reserves by central banks globally signaled confidence in the metal’s long-term value.

Implications for Investors: Gold Investment Strategies

The breach of $3,500 has significant implications for gold investors.

Long-Term Holders: This move validates the long-term investment thesis for gold as a store of value and a hedge against economic uncertainty.

short-Term Traders: Opportunities exist for short-term gains, but increased volatility requires careful risk management. gold trading is inherently risky.

Diversification: Consider increasing gold allocation within a diversified portfolio to mitigate risk.

Physical Gold vs. ETFs: evaluate the benefits of owning physical gold (bars, coins) versus gold ETFs, considering storage costs and counterparty risk.

Ancient Precedent: Similar Gold Surges

While $3,500 is a new high, history offers precedents for rapid gold price increases.

**1980 Peak