Gold: The rally continues

The Dollar Index is testing resistance at 98; breakout would offer a target of 100. The stronger Dollar has softened demand for Gold.

Dollar Index

Silver is retracing to test its new support level after breakout above $16. Respect of support at $16 would signal an advance to $17.50. Gold and silver tend to move in unison.

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The Gold Bugs Index, representing un-hedged gold stocks, is retracing after a strong rally. A correction of short duration would be a bullish sign, suggesting another advance.

Gold Bugs Index

Spot Gold continues to consolidate above short-term support at $1400, indicating buying pressure. Upward breakout is likely and would offer a medium-term target of $1500/ounce.

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Gold at a watershed

Silver found short-term support at $14.50/ounce but declining Trend Index peaks indicate selling pressure and a test of primary support at $14 is likely.

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Gold, by contrast, has found strong support at $1280/ounce, refusing to give way despite concerted selling. Breach of 1280 would signal a test of primary support at 1180 but recovery above 1300 becomes increasingly likely the longer that support holds.

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A rising Dollar would weaken demand for Gold but the Dollar Index has met strong resistance between 97 and 98. Follow-through above 98 would signal a fresh advance but a fall below 97 would be bullish for Gold.

Dollar Index

10-Year Treasury yields have also broken support at 2.4% offering a short-term target of 2.2%. Falling Treasury yields have a depressing effect on the Dollar and boost demand for Gold (by lowering the opportunity cost).

10-Year Treasury Yield

Gold is therefore at a watershed. Breach of strong support for Gold at $1280 would be a strong bear signal but respect would be a bullish sign, suggesting another advance. Probability is still favor of the bearish scenario but the bull case is strengthening.

 

 

Gold retreats as the Dollar strengthens

China’s Yuan fell sharply against the Dollar on imposition of tariffs by the US. Expect a test of primary support.

Chinese Yuan/US Dollar

The Dollar index strengthened. Follow-through above 98 would signal a fresh advance. The long-term target is 100.

Dollar Index

10-Year Treasury yields are testing support at 2.40%. Breach would offer a target of 2.20%. Rate hikes are a distant memory.

10-Year Treasury Yield

Gold continues to test medium-term support at $1280/ounce. The tall shadow on this week’s candle warns of selling pressure; as does the Trend Index peak at zero. Breach of support would signal a test of primary support.

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Silver continues to fall, heading for a test of primary support at $14. Declining Trend Index peaks indicate selling pressure.

Spot Silver in USD

Gold is likely to follow.

Gold and Silver break support

The Dollar index retracement respected support at 97.50, confirming the advance. Follow-through above 98.00 would further strengthen the signal. Target for the advance is 100.

Dollar Index

10-Year Treasury yields penetrated the descending trendline, signaling that a base is forming around 2.50%. Rising troughs on the Trend Index also indicate support. Higher yields strengthen demand for Dollars.

10-Year Treasury Yield

The stronger Dollar is weakening demand for Gold. Declining Trend Index peaks warn of selling pressure. Spot Gold broke support at $1280/ounce, warning of a correction with a target of primary support at $1180.

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Silver likewise broke support, at $15/ounce. Expect a test of primary support at $14.

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The broad DJ-UBS Commodity Index continues to trend lower, in support of precious metals. Breach of primary support at 77 would warn of another decline.

DJ-UBS Commodity Index

Gold and Silver threaten fall

Silver closed at $14.965/ounce, threatening a break below medium-term support at $15/ounce. Follow-through would warn of a test of primary support at $14. Declining Trend Index peaks flag selling pressure.

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Spot Gold is testing the base of its descending triangle, at $1280/ounce, and is likely to follow Silver lower. The bearish triangle and declining Trend Index peaks warn of selling pressure. Breach of $1280 would offer a target of primary support at $1180.

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Gold descending triangle

The Dollar continues to test resistance at 97.50, threatening a breakout. A strengthening Dollar weakens demand for Gold.

Dollar Index

Spot Gold has formed a descending triangle, testing medium-term support at $1280/ounce. The bearish formation and declining Trend Index warn of selling pressure. Breach of $1280 would offer a target of primary support at $1180.

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Silver is likewise testing medium-term support at $15/ounce, warning of a decline to $14.

Spot Silver in USD

Gold weakens as Dollar strengthens

The Dollar is again testing resistance at 97.50, threatening a breakout.

Dollar Index

Spot Gold is testing medium-term support at $1280/ounce. Declining Trend Index peaks warn of selling pressure. Breach of $1280 would offer a target of primary support at $1180.

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Silver is likewise testing medium-term support at $15/ounce, warning of a decline to $14.

Spot Silver in USD

Gold retreats

Spot Gold retreated from resistance at $1350/ounce. Penetration of the rising trendline warns of another correction. The immediate target is support at $1250.

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Silver is also retreating. Breach of $15/ounce would strengthen the bear signal.

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Crude oil has rallied since the start of the year but the primary trend is down and lower peaks on the trend index warn of further selling pressure. Breach of medium-term support at $52 would signal another test of primary support at $42 which would be bullish for the Dollar.

Crude Oil

The Dollar is gradually strengthening. Breakout of the Dollar Index above its current range of 95.50 to 97.50 would be bearish for gold.

Dollar Index

The Aussie Dollar held steady, while the All Ordinaries Gold Index retreated from its recent high above 6000. Expect a test of new support at 5400.

All Ordinaries Gold Index

Strong Dollar warns of Gold weakness

Falling crude prices have helped to strengthen the Dollar. Nymex Light Crude found support at $50/barrel, helped by an OPEC production cut, but the organization does not have the sway it once had. A test of $45/barrel is likely.

Nymex WTI Light Crude

The Dollar Index closed above 97, signaling an advance to 100 in the medium-term (next quarter). Penetration of the descending trendline on the Trend Index would strengthen the signal.

Dollar Index

Gold is likely to test support at $1180/ounce. Breach would warn of a decline to $1050/ounce (the 2015 low).

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Silver is testing long-term support at $14/ounce. Breach would offer a target of $10 but would also warn of similar weakness for Gold.

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The All Ordinaries Gold Index is consolidating between 4500 and 5500, buoyed by a weaker Australian Dollar. But Gold is more volatile than the Aussie Dollar and further weakness is expected. Bearish divergence on the Trend Index warns of selling pressure. Breach of 4500 would signal a primary decline.

Gold in Australian Dollars

Falling Crude, stronger Dollar warn of Gold weakness

Nymex Light Crude is falling steeply. Breakout below the trend channel warns of reversal to a primary down-trend. Breach of support at $55/barrel would indicate a test of $45/barrel.

Nymex WTI Light Crude

Falling crude prices are likely to strengthen the Dollar. Dollar Index breakout above 100 would signal another primary advance. Penetration of the descending trendline on the Trend Index would also suggest another long-term advance.

Dollar Index

Falling crude prices and a strengthening Dollar are likely to weaken demand for Gold. Reversal below $1150 would signal a decline to $1050/ounce (the 2015 low).

Spot Gold in USD

Silver is testing primary support at $14/ounce. Breach would offer a target of $10 but would also warn of a primary down-trend for Gold.

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A weakening Australian Dollar has so far offset the decline in the Dollar price of Gold. The chart below, however, shows strong resistance at $A 1750 to $A 1800. Declining peaks on the Trend Index warn of selling pressure and penetration of the rising trendline on the price chart would threaten another test of LT support at $A 1350. Local gold miners would be likely to follow.

Gold in Australian Dollars