Gold’s less-than fascinating struggle to hold above an important midpoint Hidden Pivot at 1775.00 and a shelf of structural support constructed back in April has entered its second week. My gut feeling is that both will give way, sending the August contract down to p2=1702.80. But even if the futures were to rally instead, a move touching the green line (x=1847.10) would trip a somewhat appealing ‘mechanical’ short with a stop-loss at 1920.00. We’ll want to attempt bottom-fishing if and when the Auggies fall to p2=1702.80, so stay tuned to the Trading Room if you’re a player. Bulls looking for a glimmer of hope should set an alert at 1826.50, just above an ‘external’ peak recorded June 17 on the way down. _______ UPDATE (Jun 29, 10:20 p.m.): Here’s a smaller bearish pattern with an interim downside target of 1739.40. A rally to x=1783.30 would trigger a weak ‘mechanical’ short, meaning it should be initiated only via a ‘camouflage’ set-up that reduce the implied risk of nearly $6000 on four lots. ______ UPDATE (Jul 1, 6:40 p.m.): The trade worked out perfectly, producing a $6000 gain in just a couple of hours. Shorting at 1783.30 would have been low-stress, since the futures never went higher than 1783.40 (!). As for covering the short position, the opportunity to do so came quickly and easily via a $15 plunge that followed the 1783.40 peak. Here’s a chart that shows how the trade evolved.
GCQ21 – August Gold (Last:1776.50)