The so-far $70 selloff from last Thursday’s peak may seem vicious to those who bought near the top, but notice how docile it looks on the daily chart. In fact, gold could correct another $125 without damaging the bullish look of this chart. Most immediately, the first place I could see bulls getting traction would be at 1191.50, or perhaps 1175.70 if any lower. A strong bounce from either would be quite bullish, especially if it goes on to exceed 1263.90, last week’s spike top. But these are very minor Hidden Pivot supports taken from the hourly chart, and we will probably be better served by using two ‘conventional’ levels to project a possible low for this correction. The first lies at 1167.60, equaling a 50% retracement of the rally from mid-January’s key low at 1071.30; and the second is at 1144.80, which would be a 0.618 correction of the rally. ______ UPDATE (10:40 a.m. EST): Gold bottomed overnight at 1191.50, precisely to-the-tick at the target given above; it then rallied $26. Since no one mentioned this in the chat room, I haven’t established a tracking position.
