by Rick Ackerman, Rick’s Picks
From a technical standpoint, I’ve been skeptical of gold’s last umpteen rallies. For months, I’ve been using a bear-market target at $1028 that lies $200 below current levels. At a gut level, however, it’s hard to be such a stubborn bear after reading the following at Fox News:
“Gold jumped on Thursday on some buying after prices plunged to a six-month low, but investors remained unenthusiastic because of a brighter global economic outlook and speculation of an imminent end to U.S. monetary stimulus.”
This is exactly the kind of stuff we should expect to read when gold is making an important turn. And although I remain skeptical about this, you can be sure that I will not be glibly dismissive of rallies such as the one currently unfolding in gold and silver futures.
Instead, I will lower the bar set here yesterday – and even allow for some mild jubilation if the rally continues to surpass prior peaks, not on the daily and weekly charts, but on the hourly. This the Comex February contract will do if it hits 1244.10 by week’s end. The futures are currently trading at 1229.80, so a mere thrust of $14.30 would suffice. One other encouraging sign I’ll be looking for is rallies that reach or exceed the ‘D’ targets of minor abcd patterns. The next such benchmark lies at 1240.40, a Hidden Pivot that is within shooting distance for Thursday night. The pattern I’ve used to project that target is shown on the accompanying chart. For now, we’ll keep an open mind.
Editor’s note: Gold touched 1240 on Friday and closed at 1238.00 in New York.
