I’ve masked the proprietary origins of the 3326.40 target shown, but suffice it to say it is the ‘d’ Hidden Pivot target of a big ‘reverse’ pattern. However you slice it, it looks like a promising spot to try bottom-fishing with a stop-loss as tight as 1.50-2.00 points. It can also be used as a minimum downside objective, since the ‘d’ target of a smaller reverse pattern was exceeded on Friday. The overshoot was just a point or two, but that is enough for us to infer that more weakness is coming. We used a similarly derived target last week to get aboard a $33 upthrust within $2 of the low. Gold has been equally nasty toward bulls and bears alike over the last two weeks, but if it breaks the 3326.40 support easily, it is bulls who are likely to get flayed — all the way down to as low as 3251.40, or even 3176.40. I’m not saying much about the bullish case because gold has been such a little sonofabitch lately, but if it surprises by heading higher Sunday evening, look for a run-up to at least 3437.80, the midpoint Hidden Pivot resistance of a conventional pattern on the hourly chart (A= 3313.10 on 6/8). A close above that number would indicate still more upside to at least 3519.40. My longer-term projection is quite bullish and calls for a rally to 3695.30. _______ UPDATE Jun 24, 10:12 a.m. EDT): The futures have breached a would-be concrete midpoint support at 3326.40, and that means they are likely to fall to at least 3251.40; or, if that Hidden Pivot support fails, to a worst-case 3176.40. Either number can be bottom-fished aggressively, provided you have the chops to limit entry risk to no more than $250 per contract. Here’s the chart. ________ UPDATE (Jun 24, 11:48 p.m. EDT): Let’s give this so-far modest bounce the benefit of the doubt, since my original calculation of a midpoint support at 3326.40 was arguably flawed. There is an alternative midpoint Hidden Pivot support at 3313.20 that came close to nailing the actual correction low at 3318.00. Accordingly, let me stipulate that the lower targets given above at, respectively, 3251.40 and 3176.40, will be in play only if the futures close for two consecutive days beneath 3313.20. Meanwhile, odds that a strong recovery is under way would shorten with a print exceeding the ‘external’ peak at 3372.90 recorded on June 23.
GCQ25 – August Gold (Last:3331.10)
