The gold market made a lower low on Wednesday and after a bounce is now targeting 1648.20. Wednesday’s decline was sharp, and it narrowly surpassed an external prior far to the left on the chart. On Wednesday evening the market came close to the new pattern’s midpoint of 1656.40, leaving traders with the decision whether to go in for “sloppy seconds”, which is not our policy but which has been known to work. The pattern’s ‘D’ target of 1648.20 would put gold in the “window” of a large bullish pattern originating at 1592.10. We will recommend that traders risk $50 on this one, with a buy at 1648.40 and a stop at 1647.90. If the ‘C’ point of 1664.60 is revisited beforehand, cancel the orders. (Posted by Doug “harry” McLagan) _______ UPDATE (10:33 a.m. EDT): Shortly after the gold pit opened, the futures rallied above our ‘C’ point and cancelled the pattern. After coming back down some, we have a new ‘D’ target of 1650.30. That’s close enough to the round number of 1650.00 to warrant a cautious approach to buying there. We should also start to anticipate volatility in the hours before Bernanke’s speech tomorrow.
