Spot gold rallied late Friday, breaking the first line of resistance at $1600/ounce. Penetration of the declining trendline suggests that the down-trend is weakening, but 63-day Twiggs Momentum remains firmly below zero. Retracement that respects new support at $1600 would strengthen the bull signal, however, as would recovery of Momentum above zero.
* Target calculation: 1500 – ( 1800 – 1500 ) = 1200
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.
Hi Colin,
You might need to move that trend line up to the top of Friday’s rally and work from there if the depression in Indian and Chinese buying is anything to go on. It makes no difference to the trend line’s validity and probably accounts for the TWO negativity,no?
Wombat
Colin’s T-line appears correct, only time will tell if Fridays big push is merely a random spike (fake-out to the up-side) or whether the primary down is broken and we start heading towards the out of this world predictions of the doom-sayers to see gold break $2,000 $5,000 or something in between? We leave it in the hands of the “Highly Intelligent” few in the finance industry & the “Rational Markets”. (Yes I am kidding; trade well & enjoy the opportunities of volatility).