Gold has been screwing the pooch all summer, so there’s no point in my trying to say something interesting. The December contract settled on Friday at the same price where it was trading on July 26, and that’s the story. The dramatic plunge in the second week of August proved to be inconsequential, a gratuitous bit of nastiness intended by Mr Market to disillusion bulls who may have begun to imagine that quotes would be basing above $2000. Bears have been disappointed repeatedly as well, since they’ve failed to push the futures down to p2=1884.70 (see inset), let alone to the D=1838.00 target of the corrective pattern shown. I’ve set a wake-up call at 1980.50, since that’s where the bullish story would start to become interesting again. A longstanding target at 2142.50 remains valid but is not worth pondering at the moment. The general impression is that bullion has been biding its time, albeit with an upward drift, waiting for the financial crisis that everyone knows is coming. _______ UPDATE (Sep 16, 5:18 p.m.) : A timid, fleeting poke to 1983.80 woke me but has left me groggy. A subsequent $23 pullback was less than inspiring, although hardly a disqualifier of the bullish outlook. _______ UPDATE (Sep 20): Zzzzzzz. _______ UPDATE (Sep 21, 9:51 a.m.): Gold is breaking down from the pennant formation I featured in last week’s impromptu ‘disaster’ presentation. Here’s the bearish pattern to watch now, with likely minimum downside to p2=1885.40. If bulls are going to turn things around before then, it would occur near 1910-11. _______ UPDATE (Sep 21, 9:05 p.m.): The futures bounced to-the-exact-tick off an 1885.40 downside target that I posted in the chat room when the futures were trading around 1917. This dead-center bullseye allowed numerous subscribers to report winning trades from the low of a so-far $40 bounce. It’ll need to exceed 1940.30 to generate a bullish impulse leg on the hourly chart. That’s where an ‘external’ peak was made Monday on the way down._______ UPDATE (Sep 22, 5:26 p.m.): To remind you, the 1838.00 downside target shown in the original chart remains theoretically viable. Bears are struggling as hard as ever to achieve it, but this has become more likely than when the futures had flailed around for a month without even getting to p2=1884.70. That secondary pivot has been touched now, though, and that has tilted the odds somewhat in their favor. ______ UPDATE (Sep 23, 10:24 p.m.): The 1838.00 downside target remains viable, but we shouldn’t be too eager to short the rally until we’ve seen Thursday’s follow-through (or lack thereof). An upthrust exceeding 1892.30 is where bulls would announce they’ve retaken control, at least for the short-term.
GCZ20 – December Gold (Last:1868.30)