Comex Gold Futures

The futures look finally to be leaving the 1214.90 midpoint resistance behind, presaging a run-up to as high as 1261.80 over the next 3-5 days.  More immediately, they are tracking a minor bullish pattern that points with some clarity to 1236.20.  If it's breached by more than $1 or so, we should infer that a test of mid-May's 1251.40 high is imminent. Night owls can try buying on a pullback to 1220.00, the midpoint associated with the 1236.20 target, but I'd suggest using camouflage if available to limit the entry risk to four ticks or less. ______ UPDATE:  The futures dipped as low as 1218.20 overnight, so any attempt to buy down near 1220.00 with an ultratight stop-loss would have been stopped out for a small loss. 

The futures spent the whole day obsessing over an important midpoint Hidden Pivot at 1214.90 that was flagged in yesterday's tout.  A two-day close above it is still needed to signal a likely thrust to 1261.80, but a stab above a prior peak at 1222.30 would likely also do the trick.  Amidst all the noise on Thursday, the futures could muster only 1220.60.  Night owls can try bottom-fishing at 1210.90, stop 1210.40.  This is the 'd' target of a corrective pattern taken from the 5-minute chart, where a=1217.10. (See also: our recent gold coverage)

The 1261.80 target that I alluded to in today's commentary is the Hidden Pivot sibling of a midpoint resistance at 1214.90 that was also mentioned. The provenance of both of these numbers is shown in the accompanying chart, and although the rally pattern is a little too obvious to be considered ideal, it looks good enough for predictive purposes.  Night owls will not easily find camouflage, since the uptrend is entering its fifth straight day, but you might try boarding on whatever pullback -- the briefer the better -- occurs following a feint above  the 1222.30 peak labeled in the chart.

The rally sputtered out a tad shy of a Hidden Pivot target at 1209.40, but expect it to get there today -- or possibly to  1213.60 if any higher -- before buyers run out of steam for perhaps a short while. Both targets are shown in the chart, and both are clear and compelling, so a push past them should be treated as good news for bulls.

The pullback from mid-May's 1251.00 peak is sufficient in theory to have recharged the futures for a rally to as high as 1369.  However, looking at the weekly chart (see inset) the eye craves more backing and filling to bring the current correction into better symmetry with the earlier correction at k-A.  In any event, a resumption of the major uptrend would be signaled by a 50-point "booster-stage" rally from the so-far point 'C' low at 1168.00 or lower.

Friday's rally in gold was as unimpressive as the one that occurred in stocks, having failed to exceed two prior peaks on the hourly chart. Still, the futures remained moderately buoyant Sunday night and appeared bound for an unambitious Hidden Pivot resistance at 1192.00 that lies just $4.20 above Friday's peak. It would refresh the bull trend on the lesser charts if the target were to be achieved; if not, the futures would be vulnerable to a downdraft to 1159.00 over the near term.

For reasons that the chart accompanying today's commentary makes clear, we should want to see gold hold above the 1156.20 low recorded on May 5, since that would avoid creating a bearish impulse leg on the daily chart.  The most bullish scenario I could imagine for today would be a pop above the 1199.80 look-to-the-left peak created May 19 on the way down.  If that were to occur, bulls would be ready to romp come Monday.

Despite the deflationist theme sounded in today's commentary, I don't see gold falling apart here. Far from it, for there are in fact just too many buyers around the world who understand that paper money, most particularly the dollar, is currently enjoying its last hurrah.  That said, we should keep a very close eye on Comex Gold's ups and downs and take seriously any bearish impulse legs that develop on the hourly chart. The ones in progress this  week played out yesterday to their lowermost target, 1186.50, prompting an update at the time that that could be it for sellers for the time being.  We shall see. But notice in the accompanying inset that there was no damage whatsoever to the daily chart. That would require a selloff this week exceeding 1156.20 -- not impossible, as we know, but until such time as it happens there's no point in worrying about it. ______ UPDATE (3:55 a.m. EDT):  DaBoyz are playing dirtier than usual tonight, taking the futures down nearly $12 just to run stops tied to a key low at 1184.40 recorded on May 10. The futures have since recovered nearly all of the loss, making the move seem in retrospect like a wholly gratuitous swoon.  The nearest Hidden Pivot target at the moment is 1194.40, $1.10 above the so-far recovery high.

As of around 4 a.m., gold was all over the place but trending gently higher nonetheless.   Earlier in the day, the futures made a tentative bottom at 1206.00, just $1.50 above the 1204.50 pivot flagged in a tout update intraday. We'll continue to use 1230.20 as a bullish trigger on the lesser charts, since a print there would create a minor but trustworthy impulse leg.  More immediately, the minor trend projected to 1217.20, but any overshoot would portend still more easy upside for the bulls. ______ UPDATE (12:16 p.m. EDT): Perhaps the selling is over for a  while, since the futures have bottomed a dime off the low of the following, now-obvious, pattern from the 30-minute chart:  A=1249.70, B=1206.60, C=1229.60 and D=1186.50.