Although gold has pulled back about $24 from its recent six-month high, it remains in a state of impulsiveness on the weekly chart since mid-August. Last week’s low of 1720.00 is the level to watch, as a move below there would give us a weekly ‘C’ point which would be sufficiently large in percentage terms to satisfy our sense of proportions. The one-off ‘A’ is very strong, but the pattern would be more bullish if the late February high of 1800.90 is surpassed by the impulse wave before the BC retracement comes in. The sustained bullishness deprives us of patterns that can project any farther down than the 1746 area for now, so if we get continued weakness, we’ll have to watch the action on the lower timeframes for signs of a reversal. The charts don’t give us very definite upside targets, either. This four-week uptrend has had at least three powerful rallies, and we might get another one before our weekly ‘A’ is in place. Keep track of the pattern beginning with A=1720.00. You’ll want to be aware of where that pattern’s ‘X’ point is. (Posted by Doug “harry” McLagan)
