Spot gold is testing primary support at $1500 to $1550. Declining 13-week Twiggs Momentum below zero warns of a primary trend reversal. Failure of support at $1500 would confirm.
The daily chart shows penetration of support at $1550. Recovery above the support level would warn of a bear trap — confirmed if there is a breakout above the February high at $1620 — but follow-through below $1500 would signal the start of a bear market.
I don’t like the look of this:
Probability of gold entering a primary down-trend is rising. Watch out for bear traps, but failure of primary support at $1500 would confirm a primary down-trend.
The stronger dollar contributes to weaker gold prices. Breakout of the Dollar Index above 84.00 would signal an advance to 89.00/90.00. Rising momentum suggests continuation of the primary up-trend.
Brent Crude respected support at $106/barrel, while Nymex Crude breakout above $98/$99 would confirm a primary up-trend. Rising crude prices would inhibit the global recovery.
Commodity prices continue to diverge from stocks, with the Dow Jones-UBS Commodity Index headed for a test of support at 126. Weaker commodities suggest that the S&P 500 advance is unsustainable.