Category: Gold & Commodities

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Gold and dollar test support

The Dollar Index is testing primary support at 81.00/81.50. Failure would signal reversal to a primary down-trend. Reversal of 63-day Twiggs Momentum below zero would also suggest a reversal, while respect of the zero line would indicate continuation of the primary up-trend.

US Dollar Index

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot Gold is retracing to test its new support level after breaking resistance at $1650 per ounce. Respect of $1640 would confirm the primary up-trend. Respect of the zero line by 63-day Twiggs Momentum would strengthen the signal. Reversal below $1640 is unlikely but would indicate a false signal and re-test primary support at $1525.

Spot Gold

* Target calculation: 1650 + ( 1650 – 1500 ) = 1800

The CRB Commodities Index is retracing after breaking medium-term resistance at 305. Recovery of 63-Day Twiggs Momentum above zero suggests a trend reversal, but only a trough above zero would confirm.

CRB Commodities Index

Brent Crude retreated from resistance at $115 per barrel. Reversal below $108 is unlikely, but would signal another test of support at $100. Breakout would indicate a test of the March high at $126. 63-Day Twiggs Momentum recovery above zero would strengthen the bull signal.

ICE Brent Crude Afternoon Markers

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Gold breaks out on dollar weakness

Raised expectations of further quantitative easing by the Fed caused the Dollar to fall sharply. Penetration of the rising trendline by the US Dollar Index would warn that a top is forming. Reversal of 63-day Twiggs Momentum below zero would suggest a primary trend reversal. Respect of support, however, would indicate that the market overreacted and the primary trend will continue.

US Dollar Index

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot Gold broke resistance at $1650 per ounce, indicating  a primary up-trend. Recovery of 63-day Twiggs Momentum above zero strengthens the signal. A trough above zero or retracement that respects the new support level would confirm the breakout, suggesting an advance to $1800.

Spot Gold

The CRB Commodities Index also benefited from the weaker dollar, breaking medium-term resistance at 305 to indicate a test of the February high at 325. Recovery of 63-Day Twiggs Momentum above zero suggests a trend reversal, but only a trough above zero would confirm.

CRB Commodities Index

Brent Crude continues to test resistance at $115 per barrel. Breakout would indicate a test of the March high at $126. Reversal below $108 is unlikely, but would signal another test of support at $90/$100. 63-Day Twiggs Momentum recovery above zero would strengthen the bull signal.

ICE Brent Crude Afternoon Markers

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Dollar up-trend continues, gold finds support, commodities range widely

The US Dollar Index is testing support at 81.50/82.00. Respect of support and the rising trendline would confirm the primary up-trend is intact, offering a target of 86.00*. Breakout above 83.50/84.00 would confirm the advance. In the longer term, expect a test of the 2010 high at 88.50. Oscillation of 63-day Twiggs Momentum above zero indicates a healthy up-trend. Failure of support at 81.50 is unlikely, but would warn of a trend reversal.

US Dollar Index

* Target calculation: 82 + ( 82 – 78 ) = 86

With the Dollar Index in a primary up-trend, Spot Gold would be expected to commence a primary down-trend. Declining 63-day Twiggs Momentum (below zero) indicates a primary down-trend but strong buying support at $1530/ounce has kept consolidation (on the weekly chart) between $1530 and $1650 per ounce. Breakout below primary support at $1530 would offer a target of $1300*. Recovery above $1650 is unlikely but would indicate an advance to $1800.

Spot Gold

* Target calculation: 1550 – ( 1800 – 1550 ) = 1300

Spot silver shows similar consolidation to gold, between $26 and $30 per ounce. Breakout will indicate future direction.

Spot Silver

 

CRB Commodities Index is testing its descending trendline; follow-through above $305 would warn that a bottom is forming — and test 325. Recovery of 63-Day Twiggs Momentum above zero would also suggest a trend change. However, reversal below 295 — and respect of zero by TMO — would indicate another test of 265.

CRB Commodities Index

Brent Crude is testing resistance at $115, having penetrated its descending trendline to suggest that a bottom is forming. Reversal below $108 would signal another test of support at $90/$100. 63-Day Twiggs Momentum below zero continues to indicate a primary down-trend; a peak below zero would strengthen the signal.

ICE Brent Crude Afternoon Markers

Nymex WTI Light Sweet Crude diverged from Brent Crude but is similarly testing resistance, at $93/barrel. Long-term oscillation of 63-day Twiggs Momentum around the zero line suggests a ranging market — between $75 and $110 — but a peak below zero would change that.

Nymex WTI Light Sweet Crude

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Dollar tests support, gold and commodities strengthen

The US Dollar Index made a false break above resistance at 83.50 before retracing to test support at 81.50. Respect of support and the rising trendline would confirm the primary up-trend is intact. Breakout above 83.50/84.00 would signal an advance to 86.00* in the next few weeks and to the 2010 high at 88.50 in a few months. Another 63-day Twiggs Momentum trough above zero would reinforce the healthy up-trend. Failure of support at 81.50 is unlikely, but would warn of a trend reversal.

US Dollar Index

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot Gold continues to consolidate on the weekly chart between $1530 and $1650 per ounce. 63-Day Twiggs Momentum below zero warns of a primary down-trend. Recovery above zero, however, would confirm that a bottom is forming. Breakout below primary support at $1530 would offer a target of $1300*; recovery above $1640 would indicate an advance to $1800.

Spot Gold Weekly Chart

* Target calculation: 1550 – ( 1800 – 1550 ) = 1300

The daily chart displays a symmetrical triangle formation. Breakout would indicate direction of the next primary move. The failed down-swing — with a reversal short of the lower border — suggests an upward breakout. Follow-through above 1640 would confirm.

Spot Gold

 

The CRB Commodities Index broke its descending trendline, indicating that a bottom is forming. Breakout above medium-term resistance at 305, strengthening the signal, would test 325. Reversal below 295, however, would suggest another test of 265. Recovery of 63-Day Twiggs Momentum above zero would also suggest a primary up-trend.

CRB Commodities Index

Brent Crude has already penetrated its descending trendline, suggesting that a bottom is forming. Follow-through above $108 strengthens the signal. Recovery of 63-day Twiggs Momentum above zero would indicate a primary up-trend, while a peak below zero would signal a decline to $75 per barrel*.

ICE Brent Crude Afternoon Markers

* Target calculation: 100 – ( 125 – 100 ) = 75

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Dollar and gold strengthen

The US Dollar Index broke resistance at 83.50, signaling continuation of the primary advance to the 2010 high at 88.50, with an interim target of 86.00*. 63-Day Twiggs Momentum oscillating above zero reinforces the up-trend.

US Dollar Index

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot Gold shows strong support at $1530 per ounce and penetration of the descending trendline now suggests that a bottom is forming — possibly in anticipation of further QE by the Fed. 63-Day Twiggs Momentum below zero continues to warn of a primary down-trend, while recovery above zero would confirm that a bottom is forming. Breakout below primary support at $1530 would offer a target of $1300*; recovery above $1640 would indicate a new up-trend.

Spot Gold

* Target calculation: 1550 – ( 1800 – 1550 ) = 1300

Spot Silver is weaker and continues to test primary support at $26 per ounce. Failure would offer a target of $16*.

Spot Silver

* Target calculation: 26 – ( 36 – 26 ) = 16

The CRB Commodities Index is testing its descending trendline. Breakout would warn that the down-trend is ending, but reversal below 295 would suggest another test of 265. The S&P 500 is likely to follow commodities lower.

CRB Commodities Index

* Target calculation: 265 – ( 305 – 265 ) = 225

Brent Crude has already penetrated its descending trendline, suggesting that a bottom is forming, but 63-day Twiggs Momentum continues to indicate a primary down-trend. A peak below zero would signal a primary decline to $75 per barrel*.

Brent Crude and Nymex WTI Light Crude

* Target calculation: 100 – ( 125 – 100 ) = 75

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Rising dollar but commodities strengthen

The rising dollar suggests weaker gold and commodity prices. The US Dollar Index continues to test resistance at 83.50. Breakout would target the 2010 high at 88.50, with an interim target of 86*, while respect would test support at 81.50. 63-Day Twiggs Momentum oscillating above zero indicates a strong up-trend.

US Dollar Index

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot Gold continues to test primary support at $1530 per ounce, while 63-day Twiggs Momentum below zero warns of a primary down-trend. Breakout would offer a target of $1300*. QE3, however, would start a new up-trend.

Spot Gold

* Target calculation: 1550 – ( 1800 – 1550 ) = 1300

Spot Silver is similarly testing primary support at $26 per ounce. Failure would offer a target of $16*.

Spot Silver

* Target calculation: 26 – ( 36 – 26 ) = 16

Commodities, and not just crude oil, however, have rallied strongly. 63-Day Twiggs Momentum oscillating below zero indicates a strong down-trend and CRB Commodities Index respect of its descending trendline would warn of a decline to 240*. Penetration above the trendline is unlikely, but would suggest that a bottom is forming.

CRB Commodities Index

* Target calculation: 270 – ( 300 – 270 ) = 240

Brent Crude has already penetrated its descending trendline, suggesting that a bottom is forming, but 63-day Twiggs Momentum continues to indicate a primary down-trend. Recovery of the indicator above zero would strengthen the bull signal, while a peak below zero would signal a primary decline to $75 per barrel*.

Brent Crude and Nymex WTI Light Crude

* Target calculation: 100 – ( 125 – 100 ) = 75

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Dollar rises, gold and silver threaten support

The US Dollar Index rallied to test resistance at 83.50. Breakout would target the 2010 high of 88.00. 63-Day Twiggs Momentum oscillating above the zero line indicates a strong up-trend.

US Dollar Index

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot Gold is consolidating above primary support at $1530 per ounce. 63-Day Twiggs Momentum below zero signals a primary down-trend. Downward breakout would offer a target of $1300*……. unless the Fed introduces QE3.

Spot Gold

* Target calculation: 1550 – ( 1800 – 1550 ) = 1300

Spot Silver is similarly testing primary support at $26 per ounce. Breakout would offer a target of $16*….. again with the QE3 caveat.

Spot Silver

* Target calculation: 26 – ( 36 – 26 ) = 16

Commodities continue in a primary down-trend, warning of a global economic down-turn. Respect of resistance at 295 by the CRB Commodities Index would warn of another primary decline, with a target of 235*. 63-Day Twiggs Momentum oscillating below zero indicates a strong down-trend. Penetration of the descending trendline is unlikely, but would suggest that a bottom is forming.

CRB Commodities Index

* Target calculation: 265 – ( 295 – 265 ) = 235

Brent Crude is also testing resistance — and the descending trendline — at $100 per barrel. Respect would indicate another decline, with a target of $75 per barrel*. There are two wild cards that could impact on price: tensions with Iran and QE3.

Brent Crude and Nymex WTI Light Crude

* Target calculation: 100 – ( 125 – 100 ) = 75

The gold-oil ratio (measured against Brent crude) is close to its mid-point of 15.0, offering little in the way of overbought/oversold readings for gold over the last  few years (after a false overbought reading — above 20 — in 2009).

Gold/Brent Crude Ratio

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The Threat From a Recession | ECRI

The Economic Cycle Research Institute, which claims a perfect recession-forecasting record, says an economic contraction is imminent. “We have not seen a slowdown where year-over-year payroll job growth has dropped this low without a recession,” ECRI states in a May report.

If, or when, the U.S. (and/or the global) economy does start to contract, commodity prices will tumble because of three factors…..

via The Threat From a Recession | News | News and Events | ECRI.

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