June Gold finished the week with a lackluster performance that nonetheless left intact the bullish pattern shown, with a 5144.00 target. The closing price was about midway along the length of a large range that stretched from 4580 to 4825. That seems excessive and could have pleased no one, but it was not especially bearish even though the futures finished the session with a $114 loss. Looking just ahead, a pullback to the green line (X=4382.40) would trigger an appealing 'mechanical' buy, stop 4128.00.
Five days of tedium could not push April Gold impulsively past the small but significant (i.e., 'look-to-the-left') peak at 4616.30 shown in the chart. That could change for the better with just a small leap, but until it happens there is no reason to give bulls the benefit of the doubt. However, just a little weakness could bring a test of a midpoint Hidden Support at 4282.90 that is associated with a 'D' target at 3964.70 (60-min, A=4736.30 on March 20). The higher number is where a reversal should occur if bulls are ready to take charge again following a month-long slide from 5434, but either Hidden Pivot can be bottom-fished provided you understand how. A side note: Bullion has sagged since the start of the war with Iran, but why? Turkey's behavior may hold some answers. Although it has been one of the world's most aggressive sovereign buyers of gold over the past decade, it sold or swapped about 60 tons of gold worth $8 billion in two weeks after the start of the war. Reportedly, this was to support a disinflation strategy that relies on a stable lira. ______ UPDATE for JUNE Gold (March 31, 7:07p.m. ET): The futures have stalled precisely at a 4709,70 'd' target, but a breakout would clear a path to 4890.10, and thence to 5144.00. That last Hidden Pivot should offer precisely tradeable resistance, but its decisive penetration would announce that bulls are back in force.
A conventional pattern dating back to February's record highs near 5600 implies the April contract will continue falling to at least 4378.70 before it can find good traction. This seems more likely at present than a reversal off Friday's low, which narrowly spared a big, bullish pattern that traces back to January and yields a 5732 target. I am featuring a bullish rABC pattern nonetheless so that you will be able to see it develop in real time if gold's correction is already over. My gut feeling is that the geopolitical world is sufficiently treacherous to support a bull market in bullion for the foreseeable future, even with the dollar and interest rates rising. If correct, this implies the vicious shakeout in bullion is already egregiously overdone. I'll leave you with the most bullish interpretation possible at the moment, a continuous weekly chart that shows April Gold to have triggered a promising mechanical 'buy' signal last week at the green line (x=4821). It is predicated on a D target at 6084.90 and requires a 4399 stop-loss. _______ UPDATE (9:19 p.m.): This afternoon's opening rip stopped out all short-term bulls. Voodoo 4273.40 looks like the next potentially tradeable bottom on a relapse, but that doesn't mean you, Nick. _______ UPDATE (March 25, 6:45 p.m.): Bulls will be on their way to 5110.90 if they can impale the 4605.50 midpoint resistance that neatly contained their progress today. Use the 60-minute chart and a=4423.20 on February 2 to draw the target pattern and tradeable levels. A pullback to 4352.70 would trigger a salacious 'mechanical' buy, stop 4,099.00.
April Gold will trigger a mechanical buy when (not if) it falls to the green line (x=4838.60). The trade is predicated on a 6084.80 target that looks like a 75% shot to be reached. I proffer this information not to get you salivating, but rather to clarify the picture at a time when price action has been lackluster and forecasts are all over the lot. The trade rates an '8.1', which means my confidence is quite high. Since the initial risk would be $41,490 per contract, I am recommending the trade only to subscribers who are quite proficient with 'camo' entry triggers, no exceptions.
Despite Gold's labored price action near the midpoint Hidden Pivot (p=4950.00), it looks like a certain bet to reach the d target at 5476.70, about 3.4% above Friday's settlement price. Since it delivered a perfect, effortless trade at the green line a month ago, there is a good chance that a tradeable top will occur at d. I am not recommending a short there, however, unless you have made money on the way up. You should also be aware that if buyers blow past the target, the next logical objective would be 5732.00, a Hidden Pivot resistance that is likely to show more stopping power than the lower one. ________ UPDATE (Mar 1, 10:49 p.m.): Tonight's breakaway gap has raised the short-term minimum target to 5510.40, a Hidden Pivot with the potential to reverse the rally for a little while. The other rally targets remain viable. _______ UPDATE (Mar 7): The 5510.40 Hidden Pivot remains viable as a minimum upside objective for the near term, but you can add another at 5732.00 if buyers easily push past it. This chart shows the provenance of the target.
The bullish view of Gold (see inset) is somewhat different from the one shown in the current Silver tout. Both were on 'mechanical' sell signals, and that is what the latter chart was intended to visualize. However, this chart has taken the further step of extrapolating the next, likely rally leg. It projects to 5476.70, and while price action at the 4950.00 Hidden Pivot midpoint does not quite guarantee the target will be achieved, it's a reasonable bet as a minimum upside objective for the week ahead. A stall at p2=5213.30, the secondary Hidden Pivot, would confirm that the pattern shown will continue to control Gold's movement until such time as 5476.70 is achieved.
Friday's moderate rally triggered a 'mechanical' short at 5033.50 that I am not recommending. The signal is a weak one because the bounce came off an intraday low that felt unthreatening. The signal is also divergent from a stronger signal in Silver that triggered earlier in the week and which is already profitble, albeit only slightly. My gut feeling is that a bullish breakout in Gold will settle the argument, but we'll wait for this to happen rather than jump the gun. If Silver wins, that would portend a fall in this vehicle to as low as 4700.60 in the week ahead.
Gold is showing rather more pluck than Silver at the moment, having failed correctively to even reach the midpoint Hidden Pivot at 4586.20, let alone decisively exceed it as Silver has. The latter's more punitive correction is undoubtedly related to its singular nuttiness in recent years. The seeming divergence will almost surely be resolved in the week ahead, and I lean toward a bullish outcome. The point 'C' high at 5113.90 does not look capable of putting up a fight, and gold showed every sign on Friday of its eagerness to test C's mettle. The only hint of trouble is that the B-C leg of this pattern did not generate a fresh impulse leg with the 5113.90 top. In any event, we'll need to wait and see how things play out over the next couple of days before assuming new record highs are coming.
Can Gold correct the monster, 1660-point rally since October in mere days? It seems doubtful, but we'll be monitoring the 4588.30 target in the chart closely nevertheless, in case it creates a bottom-fishing opportunity. That Fibonacci-based number would represent a 62.5% retracement that overshot the 50% mark on Friday, a day after topping at 5626.80. There is a small chance that the correction has seen its lows, since the 4713.90 closing price was just $2.20 from a downside target derived from a composite monthly chart that goes back to a notable top at 1920.70 recorded in September 2011. _______ UPDATE (Feb 2, 8:08 a.m.): This reverse pattern yields a clearer picture than the earlier one, which focused on the retracement without having the benefit of the robust rally that has occurred overnight. The strong push through p=4725.20 has all but guaranteed the move will reach d=5027.10. It also makes a pullbback to the green line (x=4574.20) a good bet to produce a 'mechanical' profit of at least one level (i.e., $151).
Last week's tedious scuddle left the futures on-track for a run-up to at least 4347.30 over the near-term. This Hidden Pivot resistance is just a weigh station en route to the 4529.80 target of a much larger pattern given here earlier. The D target of that pattern is 5126.10, the first I've identified above $5k. I expect potentially tradable resistance at 4347.30, but if buyers punch through it easily, that would shorten the odds of an eventual move to the higher targets given above.
