Gold

Gold's last bounce originated in a healthy spot, the 2844 midpoint Hidden Pivot support of the corrective pattern shown. A decisive plunge through that level would imply more slippage to as low as d=2714.7, but there is nothing in the price action of the last two weeks to suggest that is likely. The April contract may need to consolidate some more before it can attempt a push to new record highs above 2974.00, but even a mellow dip beneath 2844 would not spoil the bullish picture. If the futures were to fall to 2714 nonetheless, that would be an opportune spot to load up the truck.

Gold had a brush with serious injury on Friday when it touched a 2844.10 midpoint Hidden Pivot support associated with a worst-case 'd' target at 2714.10.  The April contract took a robust bounce to end the week, but a retest of the support is likely. It would require two consecutive weekly closes below p=2844.10, however, to imply that more downside to D awaits. Regardless, the futures were a good bet for bottom-fishing near Friday's lows. Immediate potential was to 2876.60 (30m, a= 2903.30 on 2/26), or 2889.10 if any higher. If an upthrust decisively penetrates that last Hidden Pivot resistance, it would imply that bulls have regained control of gold. Alternatively, a crushing fall through 2844.10 would portend more slippage to at least 2779.10.

We've used 3040.90 as a minimum upside target for the bull cycle that began last summer, but let's be prepared for a possible top somewhat below it, at 2992.50. This Hidden Pivot resistance is derived from a pattern with a somewhat higher point of origin. Conjecture favors reaching the higher target, since the so-far 12-day consolidation off the recent high would seem sufficient to push the futures more than the 20 additional points needed to reach 2992.50. We needn't play defense, however, since it will be possible to attempt shorting there without risking more than relative pocket change. ______ UPDATE (Feb 25, 7:54): As noted above, there are outstanding rally targets for Comex April Gold at, respectively, 2992.50 and 3040.90 (an oldie). Despite gold’s stall, they remain viable, but I'll use February 12's 2886.50 low as a fail-safe point. Any slippage beneath this number would be warning that bullion prices are about to come down with the broad averages. _______ UPDATE (Feb 27, 12:58 p.m.): This morning’s breach of my ‘fail-safe’ number in gold (see my last update) portends more slippage in the April contract, currently quoted at 2894.25, to at least 2853.50. If that Hidden Pivot support fails, bet on 2813.50 as a worst-case target for the near term (i.e., 2-5 days). You can buy there aggressively with a tight stop-loss, but there are no guarantees the bounce will get legs.

April Gold stalled last week en route to an important rally target at 3040.90 that will remain viable if the futures don't slip beneath 2586. You should be prepared to bid or bottom-fish aggressively at the midpoint Hidden Pivot, 2838,60, with a tight stop-loss or a small reverse-pattern trigger. If the expected pullback crushes the support, that would open a path down to as low as d=2708.60, equivalent to a correction of 8.7%. The futures would still have a chance to turn around at 2773.60, the pattern's 'secondary Hidden Pivot support'.

A 3040.90 rally target proffered here earlier remains viable, although we should be prepared for a possible stall at 2927.40, a 'secondary' Hidden Pivot. If buyers fist-pump their way through it, that would firm the case for a follow-through to at least 3040.90. The target might not work precisely because of the pattern's murky origins in a clutter of possible starting points. It is good enough for government work, however, and has kept us on the right side of the trend even when bullion was getting slammed by the white-shoe hoodlums who run the show. The ascent to 3040.90 could be relatively steep, since the breakout two weeks ago blew the cover of central banks and others who had been quietly accumulating gold after it stalled in November and traded in a range for several months.

Last week's decisive breakout above the 2791.90 midpoint Hidden Pivot shown in the chart all but clinches a follow-through to at least p2=2905.30, and thence to an almost as likely D target at 3018.70.  (The April equivalents are, respectively, 2927.40 and 3040.90.) A pullback in the meantime to the green line (x=2678, or 2700.30, basis April), however unlikely, would offer the juiciest 'mechanical' buying opportunity we've seen in a long while. More immediately, you should expect a potentially tradable stall at 2854.80 (2883, basis April), my minimum upside target for the near term. The usual imbeciles are attributing the breakout to Trump's tariff plans, whatever they might be, but also to a run on London bullion inventories by presumptive buyers in China and India, and to many other sovereign entities that evidently want to be prepared if this already-too-interesting world should turn still more interesting. There is as yet little evidence that the spike in demand for gold has fed into Bitcoin. True disbelievers in the latter's value and potential should consider betting the spread will widen, but don't expect Michael Saylor and his ilk to fade you till their heads cave in.

Careful! Feb Gold topped Friday at a double resistance of daily-chart degree. One of the impediments is shown in the chart: the 'd' target of a reverse pattern dating back to September. The second was a voodoo number that came even closer to nailing the actual high at 2794.80.  Taken together, these 'hidden' obstacles made shorting the top relatively easy. The 19-point reaction move was worth as much as $7600 to any subscriber who took my 9:34 post in the chat room seriously enough to squeeze off a trade. Of course, if the futures push past this double-trouble spot effortlessly next week, it would be a very bullish sign, leaving gold on track for a move to at least 2865.90 (A= 2525.40 on Sep 4). ______ UPDATE (Jan 30, 1:08 p.m.): February Gold’s fist-pump this morning through the red line, a ‘midpoint Hidden Pivot resistance’, has cleared a path to $3018, 7% above the current $2822. (That equates to $3041, basis the April contract.) Bullion’s dramatic burst of strength is being attributed to various factors, including Trump’s threat of tariff restrictions and safe-haven demand, but that is like saying the moon has been affecting the tides. Far more likely is that gold has caught a whiff of Big Trouble ahead that we can only guess about. I am already on record as saying stocks have topped, even if Bitcoin has yet one or two more lunatic upthrusts in it to set the hook for the most egregious speculators. The Indoos and the S&Ps may notch marginal new highs as well, but they would occur in the context of a choppy top that does significantly exceed recent peaks.

The futures did everything we expected last week, rallying to within easy distance of a 2765.80 target after falling a few points beneath the correction target at 2678 I'd provided. They will face a mountain of resistance when trading resumes, since there is not just the 2761 peak from December 12 to contend with, but also some distributive layers of supply from the record high of  October/November. If something out there is capable of spooking gold above all of this, perhaps we should be careful what we wish for.

Friday's move above my 2728.30 target was bullish and implies that a pullback would be merely corrective. I posted guidance that could have produced a profit shorting the retracement from the intraday high at 2735.00, but the position should have been covered before the close. This week, we could see more upside to as high as 2765.80, or even to 'voodoo' 2793.80, but more likely would be a pullback to 2678.60 first. You can try bottom-fishing there with a small rABC trigger to limit entry risk.