We’re Not Buying Weak Gold’s Act

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“a bullish surge to at least $1,245 is imminent. . .”

Although Comex Gold missed a bullish trigger point by a hair the other day and has since sold off by about 2%, we expect the loss to be easily recouped, and gold quotes to be bounding sharply higher, by next mid-week. Readers may recall that we recently projected a surge in June Gold to at least $1,245 once $1,171.80 was exceeded. A thorough explanation of the proprietary method we used to forecast this outcome, as well as details concerning the upcoming Hidden Pivot Webinar. Suffice it to say, on Monday, gold futures tiptoed to within an inch of our threshold, peaking at 1170.70. A further rally of $1.20 would have done the trick, but it was not to be; instead, the futures retreated without having exceeded the resistance peak shown in the chart below.

June Gold (Comex)

The resistance is what we refer to as a “look-to-the-left” peak. It is just obscure enough that not all chartists and traders, even diligent ones, will o notice it. But we surely do, as according to the Hidden Pivot Method, each discrete upthrust must surpass at least two prior peaks to re-energize the bull trend. Although the rally appears to have chickened out just shy of the “look-to-the-left” peak at $1,171.80, it did so after having surpassed no fewer than four other resistance peaks. We’ve labeled them in the chart and note that the peaks #3 and #4 are “external” highs whose breach implies more buying power than the breach of “internal” peaks #1 and #2.

What to Look for

In this context, we should think of gold’s recent rally from 1086.10 to $1,170.70, not as a mild failure, but as promising success. Although that assumption would be challenged by a severe selloff, as long as the futures hold above 1118.40 (i.e., a 0.618 retracement of the most recent rally cycle), we’ll stick with the assumption that a bullish surge to at least $1,245 is imminent. We would assume the rally to be under way following a “booster-stage” thrust of at least $21 from any low above $1,118.40.

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