Gold’s bull market has been plagued by mischievous interventions, to put it mildly. With last week’s ‘Pfizer takedown’, DaBoyz demonstrated yet again that they can make bullion move violently against common sense and logic whenever they please, albeit usually only for short periods. The 100-point selloff was triggered ostensibly by news that the drug maker has developed a Covid vaccine that is 90% effective. Is there any obvious reason why that should be bearish for gold? None that spring to mind. But with stocks in a spectacular rally that reversed sharply, investors’ anxieties appear to have infected gold, exacerbating what might have been a day of ordinary weakness for the precious metals sector.
The beneficiaries of the selloff would have been commercials who reportedly had amassed large short positions. In this case, they seized an opportunity that they themselves had created. The fact that the selloff was likely a fright-mask fraud will not make bulls’ climb up the steep wall it created any easier. But they got a good start ahead of the weekend, and this will make gold more responsive to any news that could be construed as bullish, or possibly even to a short squeeze. That would lessen the effort required to trigger a ‘conventional’ buy signal at the green line (1947), putting a 2247.10 target theoretically in play. That’s just $3 lower than our previous target, implying that the selloff, though scary, did almost no technical damage. _______ UPDATE (Nov 19, 9:17 a.m. ET): December Gold is breaking down and looks bound for the 1809.60 target shown here, at least. The A-B impulse leg lacks a one-off ‘A’, but the pattern should be good enough for government work — in this case, bottom-fishing with a small-interval rABC set-up.