Gold’s powerful rally on Friday cancelled our large bearish patterns, and the bullish impulse wave is still in progress as we go to press. The strength of the move presumably gives the gold price upward momentum which is not exhausted yet, so traders should probably use smaller patterns to play the long side for now. We will be looking for a large-scale bullish pattern to emerge on the next pullback of $25 or more. 1545.50 will be our ‘A’ point, and it is a classic. As far as larger bearish patterns are concerned, it won’t take much more upside to cancel 1674.30 as an ‘A’, which would leave 1797.70 to play the role. A pattern originating there will need a $67 to be confirmed and twice that to reach its midpoint, not something gold seems in a mood to do any time soon. (Posted by Doug “harry” McLagan)
