I am very skeptical of rallies in gold to begin with, but even moreso in this case, since the low from which it has proceeded occurred in far too obvious a place — i.e., a few ticks above a key bottom at 1162 recorded in the final days of 2016. Even so, the pattern shown qualifies as a moderately appealing ‘counterintuitive’ buying set-up. The actual signal to initiate the trade would occur on an uptick to 1224.70 (weekly chart, A= 1162.00 on 12/16/16). This looks like an odds-on bet at the moment, along with a continuation of the uptrend to at least p=1282.30 (assuming that p does in fact get hit). As always, we can use price action at p to tell us whether this rally is just another cruel tease. If the futures relapse without even having reached p, that would be cause for serious concern.________ UPDATE (August 28, 11:10 p.m. EDT): The futures relapsed to 1205.80 after getting withing $4 of the 1224.70 trigger point flagged above. We’ll continue to watch.
