Precious metals prices continued their gradual recovery yesterday, but traders remain in suspense as to when the next big move will come and which way it will go. Cautious, tentative recoveries after sharp selloffs are common in the metals, and this might be reflective of a market structure characterized by large, establishment players whose policy is to restrain the bull market as best they can. These institutions drive the big selloffs, and they often prevent prices from recovering in “slingshot” fashion from the deep selloff lows. The resultant gradual recoveries keep small-time bulls in a state of fear, lest a new lightning selloff commence in the middle of the night. This might happen any night now, but the current consolidative phase might as easily end with China and other buyers getting aggressive. Yesterday gold made a narrow new recovery high. The “D” target at 1714.50 remains the one to watch, with a a stop loss of at least six ticks recommended to short-sellers. Also bear in mind the midpoint pivot of the large pattern at 1756.30. Looking the other way, a print at 1622.80 would confirm a “D” target at 1409.50. (Posted by Doug “harry” McLagan)
