Posted on by ColinTwiggs

Gold encounters resistance as Dollar finds support

Spot gold ran into resistance at $1800/ounce and is testing medium-term support at $1700. Recovery of 63-day Twiggs momentum above zero signals a primary up-trend but we will not have confirmation until there is a clear break through $1800.
Spot Gold

* Target calculation: 1800 + ( 1800 – 1500 ) = 2100

The Dollar Index is conversely testing support at 78.00. 63-Day Twiggs Momentum may be slowing but the dollar remains in a primary up-trend. Respect of support would signal continuation — and weaker demand for gold.

US Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

2 Replies to “Gold encounters resistance as Dollar finds support”

  1. The lower degree cycle does not add up to make the bigger one. I think the December 2011 low will be broken before we see another high beyond the high of September 2011.

    1. It depends on the dollar and inflation:

      • Strong dollar (low inflation) and the $1500 low is likely to be broken, signaling a primary down-trend.
      • QE3, however, would cause a weak dollar and a primary up-trend for gold.

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