Gold

Gold's bull market remains solidly intact, but it is in no hurry at the moment to push up to the $5000 level as its handlers presumably intend. In the meantime, expect the futures to mark time with a drift down into the $3000-$3100 range, where they could cruise effortlessly for months until it's time to stretch the bullish imagination yet again. Alternatively, a decisive push above $3400 would imply that the sovereign entities that have been doing most of the buying sense a further escalation of geopolitical trouble on the horizon. The 'D' rally target associated with a 3393.10 midpoint resistance lies at 3662.80, the highest target I could foresee over the next 5-7 weeks. (Please note that 3423.20 is the equivalent midpoint resistance for the August Comex contract. It is tied to a 'D' target at 3695.30.) ______ UPDATE (June 3, 12:12 a.m.): An explosive overnight rally has pushed the August contract to a so-far high at 3417.80 that lies just an inch from the 3423.20 midpoint resistance I'd said was key. A decisive move past it will clinch more upside to at least p2=3559.20, and thence to the 3695.30 'D' target given above as my maximum upside objective for the next 5-7 weeks.

A 3360.50 rally target kept us confidently on board last week, even though DaBoyz tried their hardest to shake bulls loose on Thursday. Notice that the futures slightly exceeded the target by $6.  The 0.17% overshoot may not seem significant, but it has bullish implications in this case because the target, a Hidden Pivot resistance, should have worked precisely.  The next rally target lies at 3393.10, the midpoint resistance of a bigger, conventional pattern going back to April 7's 2970.40 low. It is tied to a 'D' target at 3662.80 that lies $153 above the previous record.

Gold's bounce from a deep hole last Thursday did not quite live up to our expectations, so the outlook is bearish for the near term. More oomph would have pushed the June futures above an external peak at 3270.40 recorded on May 13, but the buying sputtered out well below, at 3208.70. The implication is that if the bounce from Friday's low hits the green line (x=3219.20) it would trigger a 'mechanical' short, stop 2355.90. The trade would be predicated on a target at 3109.40, a good place to bottom-fish aggressively if the opportunity should arise. _______ UPDATE (May 20, 9:20): When a picture-perfect trading opportunity like the short trade recommended above doesn't produce an easy profit, it's safe to conclude that the trend you've bet on is about to reverse. This one did, although not quite with a vengeance, only a sissy punch below the belt. The rally is bound for a minimum 3360.50, a Hidden Pivot that should show potentially tradable stopping power. If bulls can punch through it, expect a test of the 3448.20 high recorded on May 6.

June Gold looks headed to at least 3730.00, but that's provided it can get past the 3533.90 Hidden Pivot I ballyhooed here for a while. (The target worked well, to put it mildly, getting within 0.6% of the actual so-far top at 3510.) If June Gold were to drop by $200 now, it would not necessarily be reason for concern; for in fact, 3135.90 would trigger a 'mechanical' buy, stop 2938.00. These numbers come from the monthly composite chart (see thumbnail inset), where A=1618 in November 2022.  Best bet for tightly stopped bottom-fishing: 3261.50, the 'd' target of a pattern discernible on the hourly chart.  _______ UPDATE (May 12, 3:08 p.m. EDT): The savage drubbing gold has received today reversed from such an obvious place that a relapse seems likely. The low for June Gold occurred at 3211.20, a hair above an important low recorded on May 1. Look for the selling to continue to at least 3147.70 before the futures find a decent foothold. (Note: The pattern on which this target is based is poorly formed, so I would not advise trying to bottom-fish there with the usual tight stop-loss.) Alternatively, a pop above 3352.70, however unlikely at the moment, would put bulls solidly back in charge. The selling feels more engineered than organic, and I doubt it threatens the long-term bull market. However, we’ll let the charts decide, since the downtrend would likely have farther to go if bearish ABCD patterns of varying time frames start to exceed their ‘D’ targets routinely

I used a tiny one-off high to draw the pattern shown, but three confirmations at p suggest it will produce only winning outcomes for us. That would imply that a drop to D=3174.50 should be bought aggressively, albeit with the obligatory micro-stop possible using a 'camo' trigger. One thing the chart does NOT say is that June Gold will necessarily reach the target, since the initial penetration of the midpoint Hidden Pivot was anything but decisive. Notice, however, that it delivered a profitable 'mechanical' short - three of them, actually - and that's usually a tip-off that D/d will be reached. We don't much trade 'conventional' patterns any longer, but this one, with its crazy point 'a' and asymmetry, seemed ripe for exploitation. _______ UPDATE Apr 6, 5:52 p.m.): As the chart makes crystal-clear, June Gold is headed most immediately to 3472.7, the ‘midpoint Hidden Pivot’ of the pattern shown. It can be shorted there, but only with a delicate stop-loss, since the futures will be on their way to 3736.00 in a trice if they blow past the midpoint resistance without hesitation. You could always try shorting up there, but wouldn’t it be far better to shove your accursed doubts aside for once and catch an almost certain 300-point rally?   

So many traders evidently anticipated Friday's low that the futures never got there. The peanut gallery would have been focused on Wednesday's 3270.80 bottom as a logical place for a test of support. It was not to be, however, and my 3264.60 midpoint support finished even further out of the money when the June contract turned higher from 3274.80, a number in the middle of Nowheresville. The subsequent bounce was impulsive on the hourly chart, implying bulls had a reason to hold a position over the weekend. This seems a little too pat to me, but I won't let skepticism cloud my thinking if bullion wants to go higher when the futures start trading again Sunday afternoon.  _______ UPDATE (May 1, 12:52 p.m. EDT): Gold’s weakness appears to be merely corrective, and you can therefore expect an upturn from no lower than 3174.50. That’s a Hidden Pivot support that lies about $80 below the current price, 3225. A second possibility, dimming at the moment, would be for this morning’s so-far low at 3209.40 to support a strong rally. That’s a ‘secondary’ Hidden Pivot, and it is capable of turning things around. The so-far moderate decline since April 22 occurred after June Gold peaked within 0.6% of a 3533.90 Hidden Pivot I first featured here when the futures were trading below $2800. It stood to be a potential stumbling block, and that has been the case. However, I doubt that gold has topped for good and expect it to reach $ 5,000 an ounce or more eventually. 

You can use the chart to judge for yourself the strength of gold’s uptrend as it progresses. The move is extraordinarily powerful, to be sure, but that doesn’t mean the rally couldn’t reverse sharply at any time with no warning. We’ve been using a 3533.90 target for the last 600 or so points, but are the odds still compelling that gold will get there? Here’s how to read the chart so that you can determine this for yourself. It shows four possible scenarios, ranked from strongest to weakest. All began with Friday’s 57.80-point reversal off a record 3371.90. That triggered a theoretical sell signal at the green line (3314.10), the first such signal in two months. The implication is that the futures will now fall to at least 3256.30, the ‘midpoint Hidden Pivot (p), enabling at least a partial profit. However, if the June contract doesn’t quite get there, and instead blasts off for new record highs, that would strongly imply 3533 will be reached, and quickly. A somewhat less bullish outcome (2) would be a strong bounce to new highs from the red line (p). That would follow the rule that powerful trends produce corrective ABCDs that do not reach their ‘D’ targets, but instead reverse from the midpoint pivot. Alternatively, if gold penetrates p the first time sellers make contact with it, that would increase the odds that D=3140.70 will be reached. And finally, if the downtrend were to crash ‘d’, that would raise the possibility that gold has made an important high at 3371.90 and is unlikely to reach 3533. I am enthusiastically recommending this do-it-yourself exercise to anyone who is interested in learning how the Hidden Pivot Method works and applying it to your own analysis. _______ UPDATE: (Apr 21, 9:21 a.m.): The blast-off scenario detailed

I've drawn a cautionary pattern because gold is long overdue for a full abcd correction, and because Friday's high occurred almost precisely at a 3261.40 target I'd posted in the chat room around 10:00 a.m.  Assuming the high endures, the rABC pattern implies a pullback to the 2868.60 'd' target is likely. (Note: You'll need to shift 'c' upward if gold continues to rise.) The years-old 'a-b' segment remains viable because no pullback since this leg was completed in 2021 has reached 'd'.  If it does now, that would amount to a 12% correction. You can bottom-fish with a tight stop at p, but be aware that its decisive breach, wherever it occurs, would warn of more slippage to 'd' or lower. _______ UPDATE (Apr 14, 1:25 p.m.): The correction predicted for gold using the weekly chart (see ‘above) would be quite painful, but there is a milder scenario suggested by the hourly chart reproduced here. June Gold, playing coy, has not yet tripped a theoretical sell signal by touching the green line (x=3205.20), but if and when it does, it should be presumed bound for the midpoint Hidden Pivot support (p) at 3147.40. We’ll be better able to judge the strength of the downtrend after we’ve seen sellers interact with p. A decisive penetration on first contact would imply more weakness, as would a subsequent overshoot of d=3031.80. Both levels can be bottom-fished with a tight stop-loss. (Note: So much for weakness!  The futures still haven't tripped a sell signal, never mind sold off. The chart has been updated and slightly revised, since the original ‘c’ coordinate was slightly off.)

The corrective pattern shown should eliminate all the guesswork, since it says quite clearly that June Gold will fall to at least 2941.49 before it can consolidate for a run-up to new record highs above $3500. If the futures should rally from Friday's lows near 3032 to the green line (x=3136.60), don't get caught up in the excitement, since that would trigger a juicy 'mechanical' short. The 2941.4 downside target will be a back-up-the-truck number for attempting tightly stopped bottom-fishing, but it will take at least 10-12 trading days for the futures to get there. ______ UPDATE (Apr 9, 9:38 a.m.): The futures went no lower than 2970 before launching anew.  This morning's sensational rally looks bound for a minimum 3141.40, a further $50 above.  ______ UPDATE (Apr 11, 9:57 a.m. EDT): Gold is head-butting the 3261.40 target of this pattern and could use a rest. If bulls shred their way past it, it will shorten the odds that my big-picture target at 3533 target will be reached, and probably sooner rather than later.