The Dollar Index rallied to test resistance at 80.00. Breakout would indicate respect of the rising trendline and another primary advance. Recovery above 82 would confirm the target of 86*. Respect of the zero line by 63-day Twiggs Momentum would also strengthen the signal.
* Target calculation: 82 + ( 82 – 78 ) = 86
Spot gold responded by testing support at $1600/ounce. Breach of the rising trendline would indicate that the long-term up-trend is weakening. Reversal of 63-day Twiggs Momentum below zero already warns of a primary down-trend. Recovery above $1700 is unlikely but would indicate respect of the rising trendline and continuation of the long-term up-trend.
* Target calculation: 1550 – ( 1800 – 1550 ) = 1300
The Gold Bugs Index, representing un-hedged gold stocks, is in a clear primary down-trend since breaking support at 500. Peaks below zero on 63-day Twiggs Momentum also signal a strong down-trend. Spot gold is likely to follow unless the Fed changes course and announces further quantitative easing.
I have stopped taking any more interest in the precious metals charts because everyone knows they are rigged!!
Hi,
If the Federal Reserve (through their agents JPM and HSBC), and LBMA, where according to Geoff Christian gold & silver is leveraged over 100:1, continue manipulating precious metal prices much longer, most if not all the physical metal will end up in the middle east and asia. Then their paper gold and silver games will end and the real fun and games will start as clients start to demand physical delivery from LBMA, resulting in multiple claims on the same unallocated metal. I very seriously doubt gold will drop much further considering the massive buy orders for physical gold and silver waiting to be filled at these levels. Performing technical analysis to determine price direction whilst completely ignoring underlying physical demand for metal is utterly ludicrous to say the least.
No-one is buying US Government Debt anymore except for the Federal Reserve (61% of total debt issuance last year) plus the bankrupt countries of Japan and UK with printed money. China, Russia and others are actively dumping US debt. The petro dollar is finished as more and more countries are entering bi-lateral swap arrangements so as to bypass the US dollar. If there is no QE then who is going to buy the $1.5 trillion of additional US debt that will need to be issued every year as well as the $2.5 trillion that needs to be rolled over this year. Bond yields would skyrocket adding an extra $200 billion for each additonal 1 per cent rise. That the US economy would then collapse, there is no doubt. As Jim Sinclair says “QE to infinity”. I wonder how much longer the Federal Reserve and the media will be able to keep the public’s eyes closed to the truth.
When the emperor has no clothes moment arrives (which can’t be far the off), the US dollar will go through the floor and precious metals will skyrocket.