Gold’s rallies have been generating successively less-overbought peaks on the daily chat (see inset), implying buyers are running out of steam and that distribution is creeping in. We’ll adopt a mildly cautious stance for the time being, monitoring price lows on the daily chart for signs of similar divergences, which would be bullish. The 1622.90 rally target given here previously remains valid in theory, but it would be negated if the correction exceeds the 1488.90 low (aka point ‘C’) recorded on August 13. Bulls got sandbagged when last Wednesday’s rally to 1566.20 reversed punitively after poking above a 1565.00 peak notched nine days earlier. That is why the retracement is likely to last for at least a few more days. Caveat emptor for now. _______ UPDATE (Sep 10, 9:28 p.m. ET): A breach of C=1488.90 looks imminent and would negate the 1622.90 target. Ordinarily I’d suggest using a ‘counterintuitive set-up to get long after such a breakdown, but my hunch is that the rally won’t get very far. We’ll spectate for now, but stay tuned to the chat room, since the picture could change.
GCZ19 – December Gold (Last:1500.10)