The pattern shown, with a 1374.50 target, is barely hanging on, having spent two straight days struggling to get airborne. Today’s pullback to the green line was technically a ‘mechanical’ buy, but we’ll pass up the opportunity and watch from the sidelines. A cautious stance is warranted because the ‘counterintuitive’ buy signaled when the green line was hit on the way up looked too promising to have failed. Looking ahead to Friday, if sellers prevail, expect a quick drop to the 1327.90 downside target of the corrective pattern. If the pivot is exceeded, that would imply more weakness is coming next week. There are bullish targets still outstanding above $1400, but bullion could remain under pressure if the broad stock averages continue higher. _______ UPDATE (August 13, 12:34 p.m. EDT): We’ll back away until the carny operators who have been spiking gold each and every morning lately decide that it’s time to modify their grift. The 1327.90 target in the chart (see inset) remains valid and seems more likely than before to be hit, since bulls will have grown increasingly discouraged by the recent succession of bull-trap spikes._______ UPDATE (August 16, 6:25 p.m.): Today’s gratuitous feint to 1364.30 slightly raised our correction target to 1328.60. Notice that the futures bounced precisely from the red-line ‘midpoint’ pivot. This makes a presumably tradable bounce precisely from the new target more likely if it is reached.
