Gold

The April contract has taken a tortuous path higher since New Year's Eve, when it tripped a buy signal tied to the 1731.30 target shown. The target has never been in serious doubt, even when a hellish $135 swoon occurred a couple of weeks ago. In fact, that tripped a 'mechanical' buy signal at p=1594.20 that may have been reassuring to those who've been in gold for the long haul.  Although 1731.30 is not quite a done deal because of the difficulty buyers had getting past p, it's probably an 85% shot to be achieved, probably within the next 6-12 days. We'll need to take stock if and when this happens, since there's likely to be a substantial correction from that number. ______ UPDATE (Mar 11, 9:44 p.m. EDT): It would be great if we could say gold has held its own, but shouldn't it be rallying as stocks collapse? Clearly, bullion is not on the list of investable assets that portfolio managers regard as safe havens. Which leaves mostly nervous Nellies to tend precious metals markets, and to dive for cover each time gold seems to be getting insufficient lift from pandemic fears. The bull market is still very much intact on the daily and intraday charts nonetheless, as is the 1731.30 target. My gut feeling is that it eventually will be reached, but that it could take longer than the 6-12 days I'd allotted. As a practical matter, a long position would have been exited at around 1695 using a 'dynamic' trailing stop such as I've detailed here before. Regardless, we should prepare for a long slog -- and perhaps be careful what we wish for, since a heightened crisis capable of lighting a fire under gold evidently would need to be more serious than the crisis we've

Gold has traded as high as 1607.90 tonight, a tad shy of the 1613.30 level needed to recoup half of Friday's savage, $98 plunge. The futures were a risky 'mechanical' buy on Friday -- a matter of catching the falling piano.  -- when they hit p=1594.90 (see inset) on the way down. We passed up the trade but may consider testing the water with another 'mechanical' set-up if gold falls anew to X=1526.70, the green line.  The 1731.30 target remains viable despite the viciousness of last week's selloff, but we'll give bears wide berth until price action turns a little more subdued. ______ UPDATE (Mar 5, 4:20 p.m.): No change: I remain bullish, with a 1731.30 target. Stay tuned to the chat room, since trading this vehicle requires close attention to the one-minute chart. Here's one that is relevant at the moment. _______ UPDATE (11:18 p.m.): Minutes after I posted this pattern in the previous update, its 'd' target at 1669.40 caught the low of an $8 rally within two ticks. The trade could have been worth as much as $3200 to anyone who bought there.  Not bad for three hours' work.

Gold took an unusually vicious hit on Friday. Presumably it was gratuitous, since the plunge left intact a 1731.30 target shown in the chart (slightly adjusted from the 1732.90 objective in play since December). Why the selloff?  There was widespread suspicion that it was somehow related to the coronavirus pandemic, and although it undoubtedly was, the further details of this theory, at least to the extent they were aired in the mainstream media, were unpersuasive. My own theory is that gold, which tends to rise when shares are falling, simply couldn't keep pace inversely with last week's wholesale collapse in the stock market. Moreover, even before the avalanche, bullion prices had spiked to heights that begged for a rebuke. A Double Whammy The result was a double whammy -- a sharp but needed pullback, exacerbated by a dam of disappointment that gave way Friday morning. Despite this, April Gold's odds of achieving 1731.30 have not changed. They were around 70% before and remain so now. This implies that a pullback to the green line (1526.70) should be bought 'mechanically'. The $68 stop-loss is too big to abide, but if and when the futures hit our number, we can use 'camouflage' tactics to get on board on-the-cheap. Why aren't the odds even better? It has to do with the way buyers penetrated p=1594.90 the first time they hit it. It took a three-day pullback and a running start to get past it, then, following a correction, another six weeks to put it decisively behind.

Pay no mind to reports that a big player unloaded $3 billion worth of gold contracts into Monday's tidal surge in bullion, knocking quotes down by $37 before the session ended. In the first place, we were ready for this 'surprise', since the intraday high at 1691.70 occurred less than a dollar from an important rally target I'd begun drum-rolling several weeks ago. More significant is that at its peak, the upthrust slightly exceeded a midpoint Hidden Pivot resistance associated with a D target at 2285.90. This is shown in the chart, and although it will take a more decisive penetration of p=1666 to put D solidly in play, gold's strength over the near term is likely to feed off a stock-market selloff that has farther to go.  If and when the futures blow past 1666, institutional whales like Monday's big seller in gold will be powerless to stop it. _______ UPDATE (Feb 25, 6:35 p.m. EST):  Although gold has given up $60 of its recent gains in the last two days, sellers have had to work hard to pull it down to bargain levels. This feels bullish, as does the tentative bounce the April contact took from the 1629.50 Hidden Pivot support shown in the chart. Let's see how well the good guys perform today. If they can push the futures above the 1666.70 point 'c' of the pattern shown in the chart, they'll be back in the driver's seat. _____ UPDATE (Feb 26, 8:28 a.m.): Gold is timid today, down $15 at the moment and acting spooked by a patently phony, feeble rally overnight in index futures. It will turn around only if and when stocks dive anew. The good news is that they have MUCH further to fall before they achieve the 20% correction 'required' to qualify

Gold continues to bide its time, coping with seemingly limitless strength in the stock market.  Precious metals have held up well, considering that even two-day selloffs on Wall Street are becoming an endangered species. The chart shows nearly a month's worth of tedious oscillations punctuated by a couple of gratuitous feints higher. One of these days buyers will catch fire and complete the pattern shown in the chart, pushing this vehicle to a target at 1690.20 flagged here earlier. In the meantime, unless there's a dip beneath the 1542.80 point 'C' low, our minimum upside objective will remain p=1616.50.  We can trade it from either side of the market almost at will, as a $2200 scalp demonstrated on Tuesday, but this will require more patience than most of us have got. ________ UPDATE (Feb 19, 7:01 p.m.): After rallying sharply over the last two days, April Gold has stalled just 60 cents from the 1616.50 target we've used as a minimum upside projection. Two consecutive closes above it would put the 1690.20 target also flagged above in play. The move has been easily tradeable, even by doubters and nervous Nellies, using mechanical set-ups like this one. ______ UPDATE (Feb 23, 10:14 p.m.): The little sonofabitch exploded higher on the opening bar tonight, recording a peak at 1684.10 that missed my longstanding target by just $6.10. How could you have exited on the fleeting spike? Check out my posts Sunday evening in the Trading Room for the simple secret of the 'dynamic trailing stop'.

It's been three weeks since April Gold generated a bullish impulse leg on the hourly chart, but it could happen as early as Sunday night if there's follow-through to Friday's upswing. That would exceed  the 1603.00 'external' peak shown in the chart, refreshing the energy of buyers. It would also put p=1616.50 of this pattern in play as a minimum upside objective over the near term. As always, an easy move through a midpoint pivot would puts its associative 'D' target in play -- in this case 1690.20. We can trade the various Hidden Pivot levels long or short as opportunities arise, so stay tuned to the chat room if you're interested. Incidentally, there is an alternative point 'A' low $2.80 above the one I've used, but we may have to wait until the futures hit the respective p midpoint of each before we choose which 'D target to use. _____ UPDATE (Feb 3, 9:37 p.m. EST): Gold's head-fake Sunday night was short-lived, falling $4.60 shy of the 1603.00 benchmark identified above. The subsequent selloff, all too typical for gold, occurred when index futures took flight, propelled by panicky short-covering.  I have nothing new to offer, but the 1616.50 target can still be used as a minimum upside objective. _______ UPDATE (Feb 4, 9:07 a.m.): Gold is getting pulped today, as usual, because the stock market is in the grip of an insane rally. The 1616.50 rally target will remain viable IN THEORY until such time as C=1542.80 is penetrated to the downside. This will come as scant consolation to gold bulls, but it is what the charts say. Worst case, short term: 1540.90 (60-min, a=1603.00 on 1/8 at 1:00 a.m.) _______ UPDATE (Feb 4, 9:47 p.m.): The futures have tripped a minor rABC buy signal of modest appeal at

April Gold's wild gyrations came within an inch of triggering mechanical buy signals twice today at the green line shown in the chart. The trouble is, there was a $10 rally separating them, and the first pop should easily have reached the 'D' target at 1600.50. Instead, after the futures topped $10 shy of it, bulls had to endure a mini-crash at day's end when bullion quotes reflexively dove on a late-afternoon short-squeeze in the broad averages. If the weakness carries into Friday, the futures would become a moderately enticing buy at 1564.60, the midpoint Hidden Pivot support of a pattern on the 30-minute chart that began on January 8 from 1603.00.  To cut the entry risk down to less than $1 theoretical, I'd suggesting using an rABC pattern where a=1581.60 at 9:00 a.m. on 1/30.

Friday's upswing reflexively mirrored the decline of stocks, triggering a theoretical buy signal at 1573.40 in February Gold. I say 'theoretical' because we seldom use this entry tactic due to its high-risk, low-performance track record. In this case, the implied stop-loss at 1536.30, just below the pattern's point 'C' low, would risk a whopping $3700 per contract. We'll trade the futures with a bullish bias nonetheless, predicated on an expected move to at least p=1610.30.  (A 1732.80 target tied to a bigger pattern is also in play, but we'll stick with the little stuff for the moment in order to manage risk most efficiently and precisely.) In practice, this will entail using mechanical and rABC set-ups as they become manifest each day. Stay tuned to the Trading Room and Coffee House if you care, since there are a dozen Pivoteers in these rooms at any time who can trade the bejeezus out of gold using patterns big, small and in-between to significantly limit risk. _______ UPDATE (Jan 28, 7:55 a.m. EST): The futures are diving ahead of the opening, evidently despairing over the insane strength of index futures overnight. My hunch is that it could conceivably get worse, but not much, since stocks may already be close to their daily limit for giddiness. _______ UPDATE (Jan 28, 8:58 p.m.):  Things did indeed get worse, but not much. Brace yourself for another grin-an-bear-it day if the stock market continues higher. ______ UPDATE (Jan 29, 9:48 p.m.): Gold benefited from an afternoon selloff in stocks and took a spirited upturn toward 1594.60, the D target of the pattern shown in this chart. (Note: The equivalent target for the just activated April contract is 1600.50, with p=1584.20.)

The futures recovered somewhat after getting knocked down midweek, but not before they'd impaled a 1592.80 midpoint resistance tied to a bull-market target at 1732.50. Odds of reaching so optimistic a benchmark would shorten if the monthly bar finishes above the 1592.80 midpoint pivot. There's little value in speculating about this now, but if the futures pull back to the green line at 1523.00, that would trip a moderately appealing 'mechanical' buy signal we can leverage in several ways. For detailed guidance in real time, tune to the chat room if weakness brings the February contract down another $30 or so. _______ UPDATE (Jan 14, 10:05 p.m.): Buyers have come back to life with a bounce precisely from the midpoint Hidden Pivot support shown in this chart. The rally will become interesting if and when it exceeds C=1564.10 of the pattern shown, wrecking the short-term-bearish look of the lesser charts. ______ UPDATE (Jan 21, 8:14 p.m.): It's just like gold to pop above my number, 1564.10, and then to tank. I'd said that such a rally would pique my interest, but I must confess that it has only tested my patience. For now, you can use p=1549.30 shown in this chart to get long a tick above with a stop-loss as tight as four ticks. If you can convert this to an rABC set-up, it would improve your odds. _______ UPDATE (Jan 22, 9:36 p.m.): Today's marginally higher high created a new point 'C' along with a new midpoint pivot at 1552.70 where you can attempt bottom-fishing. I've labeled a and b coordinates in this chart that would be appropriate for using an rABC set-up to get long, but a 1552.90 bid, stop 1551.90 will suffice, albeit with somewhat more risk. _______ UPDATE (Jan 23, 10:37 p.m.): The recommendation proffered