Gold Just Inches From Trouble

Idle rate-hike threats burbling from Yellen’s pie-hole on Friday generated a Whoopee Cushion rally in gold that signified absolutely nothing.  Unfortunately however, the rally will likely have burned up some short-covering buying power that had kept the futures from sinking even more than they did last week. On Monday look for more weakness, perhaps after a weak distribution-rally early in the session.

If the downtrend exceeds the post-Brexit low at 1314.80 recorded on June 28, it is going to stop out some bulls, which paradoxically would be bullish, but it could also embolden sellers. The best way to determine which is likely to prevail is to simply monitor ‘impulse legs’ in both directions as they develop on the lesser charts. If bulls are going to regain the upper hand, we should see minor abc corrections fail to reach their d targets, and rallies exceed theirs. Whatever’s ailing gold, it’s nothing that a thrust this week exceeding August 16’s 1364.30 peak wouldn’t cure.

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