The gold price has been bullishly impulsive since last week’s 1526.70 low, and the charts leave us no choice but to wait for a pullback before we can assess where the metal is going next. The rally so far has reached 1599.00, and it would take a decline of about $21 to give us a BC leg that we could work with. If the rally continues without such a retracement, its ability to surpass one or both of the prominent prior highs of 1602.20 and 1609.00 will be telling. If 1599.00 holds and the price drops as far as 1568.60, a bearish pattern beginning at 1648.00 will be activated, and we’ll have a “D” target at 1477.70. A print at 1562.60 would point as far down as 1453.40 (A=1672.30). The bigger picture is made somewhat confusing by the ambiguity of last week’s seemingly important low, inasmuch as the June and August futures surpassed the December 29 low, but the spot price, the “continuous” futures contract, and the December 2012 contract did not. Bear in mind that by the end of July the December 2012 contract will become the “front” contract and will remain so for the next four months, given the way traders deprecate the October gold contract every year. (Posted by Doug “harry” McLagan)
