Gold took an unwarranted leap Friday on meaningless news of weak job growth. Under the circumstances, we should step back and let the correction run its course rather than trading this vehicle as though it is about to blast off for outer space. To be sure, the rally was powerfully impulsive on the hourly chart, and any pullback Sunday night should be regarded as a possible buying opportunity. But I have my doubts nonetheless that the steep trajectory of the move that ended the week will continue into this one. I’ll publish an update after the futures have opened Sunday night if warranted, but in any event, you should use the still-developing pattern shown for trading purposes. For a bigger picture, try this one on the daily chart: A=1074.00 (1/14/16); 1263.00 (2/11). The outlook is clouded by a lengthy consolidation that has produced ‘dueling’ impulse legs. The overall look of the chart is bullish, but the failed attempt to reach the 1382.00 target following a promising push past the red line (a midpoint Hidden Pivot at 1288.00), is worrisome, as is the failure — by just three crucial ticks, basis the August contract — to surpass January 2015’s ‘Matterhorn’ external peak at 1308.20.
