I sympathize with my goldbug friends who are, quite rightly, alarmed at the degree of manipulation going on in gold futures. It’s been happening for quite some time, and so I hesitate to put much energy into charting it anymore.
In our last major update on Jan 23 [see: Gold Recovers its Luster], I wrote:
The close-up shows the stronger case that could be made for a drop to the yellow .500 Fib level. But, TPTB apparently decided that would be bad for business (or under-collateralized ETF’s, depending on whether or not you trust the bankers.) As a chartist who believes most “markets” are highly manipulated lately, I have my own thoughts on the matter…
For those who are interested, however, it’s worth noting that GC just tagged that yellow .500 Fib level and the bottom of a fairly well-formed channel at 1072.3 that should mean a significant bounce. The initial target would be the neckline (1140) of the just-completed H&S Pattern (that targets 970.) If things really got going, 1285 looks mighty interesting.
Take all of this with a pound of salt, because the predatory manipulators are quite well aware of these patterns. And, they know full well that the best way to wipe out a bunch of traders is to bust very obvious patterns.
A casual glance at the long-term chart shows many anomalies that never should have occurred, but quite obviously did. So, these charts are presented purely in the spirit of understanding what TPTB might have in mind as they script gold’s next moves.
With that said, if GC doesn’t bounce here, it opens up the purple 1.618 extension at 1024, the H&S target at 970, the white .786 fib at 946.9 and (the most interesting target IMHO) the yellow .618 at 891.20.
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