Gold

We've all been wondering when $2000 will start looking more like support than resistance, an eventuality that showed no sign of happening over the last few weeks with the futures cavorting there and teasing bulls. It was an annoying exercise in tedium as gold slid up and down a greased pole of hopes and expectations. It doesn't help that most of the action took place beneath a slew of 'external' peaks recorded last May and July. My hunch is that the excruciating excess of deliberation is a consolidation for a sustained move that will ultimately leave $2000 in the dust. We'll continue to trade with a bullish bias unless a salaciously appealing opportunity arises to get short temporarily.

Gold completed a shallow consolidation last week before launching toward the 2068.00 target we've been using as a minimum upside objective. If buyers plow through this Hidden Pivot, our next price objective would be 2133.10, calculated by sliding the point 'A' low of the reverse pattern down to an 1820.00 low recorded last November. That would produce a conventional ABCD pattern, but it would be sufficiently gnarly to make the resulting Hidden Pivot levels useful for trading.

With gold in one of its steepest climbs in recent memory, the 2068.00 rally target billboarded in my last update looks like a lock-up. The December contract's midweek stab through p=1945.80 all but clinched this outcome, along with a likely test of May's $2129 record high. That would bring into play an even bigger, bullish pattern begun in November 2022 from 1711 and which targets 2241.90.  These are the most ambitious targets I've broached in a year, but my high confidence is commensurate with the rally's steepness and the intimidating difficulty of climbing aboard.

Even though Friday's rally was the best we can recall in a long time, there are still reasons to believe it may not have been the usual fraud. We'll know once we've seen how buyers handle the green line (x=2041.60). Ordinarily a hit there would trigger a succulent 'mechanical' short to as low as D=1777.10. My hunch, though, is that the rally will liquefy the Hidden Pivot resistance and keep on going, ultimately surpassing the nasty, bull-trap summit at 2129.70 recorded back in April. In the meantime, using x=2041.60 as a minimum upside objective, we have a hundred points of bull-friendly turf to play with. ______ UPDATE (Oct 18, 9:10 a.m.): Buyers had little trouble pushing past the 1955.40 'D' target of a gnarly pattern this morning, implying they will be gung-ho to take on an important 'external' peak at 1972.40 before pressing on to an all but inevitable rendezvous with $2000. Here's the chart. The move targets a minimum 2068.00 on the daily chart (reverse A=1885.20 on 3/8).

Friday's rally was impulsive on the hourly chart and the best we've seen in a week. However, if bulls meant business, they would have taken out the 1849.30 peak recorded on October 3 to complete a hat-trick of 'priors'. Instead, they stopped a hair short of it, presumably too out-of-breath for a final-hour sprint to the finish line. We should give them the benefit of the doubt nonetheless, since the shallow correction off the intraday high suggests that at least somewhat higher prices are coming.  My advice is to keep your expectations low until we've seen how the rally interacts with a couple of minor Hidden Pivot resistances. _______ UPDATE (Oct 12, 8:55 p.m.): A sharp rally reversed just as sharply this morning when the regular session began, but not before buyers had pushed the futures above some external peaks recorded at the end of September. This generated a bullish impulse leg on the hourly chart, shortening the odds of another leg up once the correction has run its course.

Gold is close enough to the depths of despair that we might hope for a rally. However, since hoping is for losers, we'll just watch and learn to like it as the futures swirl down the crapper. Ordinarily, Friday's slight overshoot of D=1865.20 would be no cause for alarm, but in this case we'll infer the worst -- i.e., that the support should have held if gold were ready to turn. If you want a slim reed to grasp, use the 1855.40 target of this gnarly pattern. It's okay to back up the truck there, but only if you use a very tight stop-loss. (Note: I have not boldfaced and colorized the target because I don't want to draw attention to it.) _______ UPDATE (Oct 2, 9:19 a.m.): The $7 rally from within less than a dollar of the number given above would barely have paid for a Soho lunch, although the very tight trigger interval (TI) I'd advised would have prevented a loss. The subsequent relapse means gold is still in gold-is-garbage mode. A little overdone, don't ya think?  _______ UPDATE (Oct 2, 11:07 p.m.): The futures look bound for the 1777.10 target of the reverse pattern shown here.  I am awed by the viciousness with which the bullion bankers and their scummy friends in high places have defenestrated, drawn-and-quartered, impaled and flayed those who might have intended to take delivery on September COMEX contracts. When there's no 'physical' available to supply, Their solution is to crush demand.

I've reproduced a chart that goes back to 2019 in order to show clearly that there has been little drama in more than three years. Comex futures are trading about where they were in the summer of 2020, meaning there has been no net gain since then. The chart is unmistakably bullish and projects to as high as 2326.30 (basis the August contract), but that doesn't mean gold couldn't fall by $200 or more before it heads into, if not the wild blue yonder, then perhaps toward a towering cumulus cloud on the horizon.  A pullback to x=1864.10 in the meantime would trigger a 'mechanical' buy with excellent odds for success, but we'll wait until it gets there before we discuss entry tactics.

Gold is in an obligatory bounce from the green line (x=1934.00), and any long positions initiated there would be showing a paper profit of around $4400 on four contracts. The futures would need to hit p=1954.30 to signal a partial exit, but bulls looked sufficiently energized to accomplish this when trading resumes Sunday evening. I have my doubts that the run-up will reach D=1995.00, though, in part because the turn from the recent low looked too agonized. Regardless, 1995.00 is theoretically in play and would become an even better bet if the rally impales the midpoint Hidden Pivot on first contact. _______ UPDATE (Sep 18, 9:17 p.m.): The textbook 'mechanical' buy that triggered a week ago at x=1934.00 has gone on to produce an $8000 gain for anyone who did the trade. It is time to realize half of your profits now, since the futures this evening have touched the red line (p=1954.30) as anticipated. Here's the chart.  _______ UPDATE (Sep 20, 8:20 p.m.): The vicious bull-trap stab this morning to 1069 was short-lived, but it gave anyone still long an opportunity to exit with an additional $1800 for each contract still held. If you kept 25% of the original position for a swing at the fence, I'd suggest an 'impulsive' stop-loss at 1943.70 for now.

Bulls and bears ended the week playing patticake, somewhat shy of the green lie (x=1934.0) where bottom-fishing would become mildly enticing. A one-level bounce seems likely, although the pattern's elongated B-C leg has diminished the bullish impulsiveness of this picture sufficiently to make a run-up to D=1995.00 less than an even bet.  Although that's unlikely to stoke your enthusiasm, we should try nonetheless to get a piece of the implied 'mechanical' bounce that is indicated with a tight 'reverse trigger'.  Tune to the chat room for possible guidance on this. _______ UPDATE (Sep 12, 7:59 a.m. EDT): The futures have in fact come down to the green line, implying it's time to set up a trigger for the 'mechanical' buy suggested above. On the hourly chart, the nearly 4-point 'natural' a-b is a little rich for my taste, so I am using a= 1947.30 (9-11 at 9:00 a.m.) to set up the trade with a $$1.70 TI. Based on the so-far low at 1933.40, the trade triggered a few minutes ago at 1935.10. First partial profit would be at p=1936.70. For comparison, the more natural a-b, where a=1939.50 on 9-10, would trigger at 1937.40, based on the so-far low at 1933.40. We shall see. _______ UPDATE (Sep 13, 6:20 a.m.): Although the small pattern got stopped out for a $170 loss per contract, the more 'natural' $4 trigger went on to produce a gain of $380 in about an hour.  This is not bad, considering we went long against weak, sloppy price action. Here's an interesting chart from Erik Volma at Gold-Eagle.com. It shows what gold prices did during stock market crashes going back to 1970.