Gold spent most of last week in a measured ascent, only to falter when it counted. Notice that the 1738.00 high failed by a millimeter to surpass an ‘external’ peak at 1739.10 recorded a week earlier. That would have created a robust impulse leg on the hourly chart; instead we got a pathetic one. This is notwithstanding the faintly encouraging rally on Friday afternoon. It may have felt exhilarating at the time, but in fact it surpassed no significant previous peaks. It must therefore be reckoned a fake, a judgment that can stand pending better performance. Let’s set the bar at 1741.20 to tell us when a rally becomes worthy of our attention. That’s a tick above a small but technically useful peak recorded March 1 on the way down. Even more encouraging would be a fist-pump above the 1757.40 point ‘C’ high of the downtrending ABC pattern shown in the chart. It was slightly bullish that the 1667.20 downside target was not reached, but negating the pattern itself with a move above ‘C’ is what bulls should want to see. Alternatively, my worst-case target is still 1630.50, a dubious pattern using a ‘marquee high’ that will have to suffice for now. ______ UPDATE (10:06 a.m. ET): Gold’s rally has done what virtually all of gold’s rallies do when they become moderately encouraging– i.e., turn to ca-ca. I am particularly skeptical when the rally seems to have been caused by some utterance by Jerome Powell, the Federal Reserve’s charlatan-in-chief. I will continue to set a high bar for rallies to avoid getting sucked in by fakes. _______ UPDATE (Mar 18, 6:29 p.m.): Regarding the ‘high bar’ mentioned above, you can wake me if and when an upthrust hits 1768.60, since that would generate an impulse leg on the hourly chart with some oomph to spare. The relevant ‘external’ peak that that would slightly exceed occurred Feb 26 on the way down.
GCJ21 – April Gold (Last:1734.60)