Yesterday’s action in the gold market was dramatic but inconclusive with respect to which way the next big move will go. The low of 1706.70 is visually outstanding but has not (yet) become part of any useful patterns. Gold traders should now be watching a series of prior highs ranging from 1739.20 to 1818.80, as shown on the attached chart. All of these priors would be surpassed if the “D” target of the pattern indicated were to be reached. Yesterday’s decline missed by three ticks the important low marked “C” on the chart, below which there was a lot of daylight. The pattern mentioned yesterday remains active with a “D” target of 1690.10, but the market has moved back to being closer to the first notable upside pivot at 1763.20, which is the midpoint of the pattern marked on the chart. Just as we noted yesterday with regard to long- and medium-term rallies needing further corrections, yesterday’s relentless recovery from the low also needs to pull back. We’ll have to wait and see whether the market obliges. (Posted by Doug “harry” McLagan)
