Gold is undergoing a correction on the weekly chart. Breach of support at 1625 would indicate another test of primary support at $1525. Retreat of 63-day Twiggs Momentum below zero warns of a primary down-trend. Recovery above $1700 per ounce, however, would indicate that the correction is over.
Crude oil, however, is rising, with Brent Crude breaking resistance at $117/barrel to signal a primary up-trend. Twiggs Momentum rising above zero already suggests an up-trend. Recovery of Nymex WTI above $99/barrel would confirm.
* Target calculation: 116 + ( 116 – 106 ) = 126
Normally gold and crude move together. A divergence would be highlighted by the gold-oil ratio (below). A decline to 10 is normally taken as buying signal, but in recent years fluctuations have been a lot narrower — between 12 and 18.
