I've been doing my best to avoid raising your expectations for gold, since technical signs have not looked too promising for the last couple of months. Most recently, we focused on some Comex charts to tell us whether the intermediate-term trend might be changing from bearish to bullish. The drum-roll number was 441.20, basis the July contract, and although the futures came within $2 of that price last week, they have since receded by nearly $10, dashing our hopes for the umpteenth time. But this latest bout of weakness may be just what bullion needed to recharge for a sustained move above the $451 peak recorded on March 11. The bullish scenario looks more compelling in the chart of the HUI, and that is why I have reproduced it below instead of a Comex chart. I've labeled an AB impulse leg and a CD follow-through leg that has a 'D' target just a couple of points beneath last Thursday's 175.32 bottom. To be precise, the hidden-pivot target lies at 172.69, slightly less than 3 percent away. My hunch is that the current correction in gold will not end before that number is reached. However, that could be within a matter of days, so we should be prepared to attempt some bottom-fishing in some of the mining stocks tracked in Rick's Picks. As has been our practice in recent months, any bids will be tied to very tight stop-losses. This is because, if the 172.69 pivot works at all, it is likely to work very exactly. If so, there is no reason to risk more than small change as we speculate against the trend. Detailed strategies for doing so will be provided this week in the Current Touts section of the newsletter.
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