Gold

The bullion bankers' fright-mask tactics should have scared no one, since gold futures are obviously consolidating near the high end of March's astounding $250 swoon. My minimum upside objective is 1751.70, the secondary Hidden Pivot of the pattern shown, but any higher would portend more price expansion to at least 1852.00. I waxed skeptical here earlier that this rally could hit $2000, but because the demand for physical has begun to overwhelm supply, I am more optimistic that the move could get legs beyond my target.

Yesterday in the chat room, I asserted that gold should have been up $120, not a mere $70, to discount the Fed's planned dollar giveaway to...EVERYBODY. However, I was unmindful of the fact that the supposedly omniscient stock market is actually as dumb as a fence post, hence the delayed reaction. It can be dumber than a fence post, actually. Recall how it took more than two weeks for stocks to drop after people began to keel over dead in Wuhan. If Feinstein and Burr knew enough to sell their shares, 'the market' should have too. Anyway, I do NOT see inflation on the horizon, and that is why I think this rally is unlikely to hit $2000. We should enjoy it while it lasts, though. It is guaranteed to hit a minimum 1731.20 (basis April) over the very near term, or 1852.00 if any higher, with a possible stall at 1751.70.  The chart shows the provenance of these targets.

For all of last week's violent price swings, the April contract appears to be basing above 1450. The 1407.30 downside target remains viable nonetheless, and the futures did in fact trigger a 'mechanical' short to that number on Friday at 1517.60 (240-min, A=1597.90 on 3/13).  Looking at a much bigger picture, the chart (inset) stretches back a decade in order to put the bull cycle begun in 2016 in a useful perspective.  You don't need to be a technician to see that the $260 surge begun last November, encouraging though it was, fell well shy of the moon shot that would have signaled much higher prices. Specifically, the upthrust failed to generate a strong impulse leg on the weekly chart when it died well shy of the key peak at 1794 recorded in 2012. That doesn't necessarily mean the high won't eventually be exceeded, only that it could take quite a while -- meaning years -- for it to happen. I am not ruling out a spectacular bounce shortly from somewhere above 1400, but if there is instead a protracted rally, even a strong, steady one, its potential would likely be limited. _______ UPDATE (Mar 23, 5:57 p.m. EDT): Gold's biggest rally in recent memory failed to exceed even a single 'external' peak on the hourly chart. The nearest lies at 1574.80, about $5 above today's high, but we'll reserve judgment about the health of the uptrend until we've seen a little more of it.

A spectacular two-day sell-off has negated the 1731 rally target we were using. Although this has not significantly altered the still-bullish look of the long-term charts, it has put gold in a deep hole that could be difficult to climb out of.  There is a 40% chance nevertheless that the futures have seen their lows for the time being, since Friday's bottom occurred at a 'double' Hidden Pivot support. The chart shows one of them, a secondary pivot at 1508.40; but another, unseen, is the D target of a slightly different pattern with a higher 'B-C' segment. If the so-far timid bounce continues and turns into a bona fide rally, it would need to surpass the 1610.00 peak recorded Thursday on the way down to become significant. ______ UPDATE (Mar 16, 8:45 a.m. EDT): Gold is getting whacked under heavy liquidation by investors whose idea of a safe haven, evidently, is any asset that can be hocked up the wazoo. This chart says the April contract, currently at 1461, will fall to at least 1407 groping for traction. _______ UPDATE (Mar 16, 8:32 p.m.): Bullion and mining shares have been so perverse lately that we should allow for the possibility of a powerful rally for no good reason. If it can surpass an 'external' peak at 1574.8 made Sunday on the way down, I'd infer that bulls are back in charge and capable of challenging last week's 1700.70 high. _______ UPDATE (Mar 17. 8:41 p.m.): I'm raising the bar to 1598.0 before I believe this rally might go somewhere. That's a tick above an 'external' peak recorded March 13 on the hourly chart, one peak above the one noted earlier at 1574.80. Failing that, the 1407 target given above will be back in play.

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'.