Gold is falling fast, but should find short/medium-term support at $1200/ounce*. Breach of that level would offer a target of $1000.
* Target calculations: 1350 – ( 1500 – 1350 ) = 1200; 1500 – ( 1800 – 1500 ) = 1200
Silver similarly offers a target of $16/ounce*.
* Target calculation: 26 – ( 36 – 26 ) = 16
Dollar Index
The Dollar Index respected its primary trendline at 80.50 and is headed for another test of 84. The 13-week Twiggs Momentum trough above zero suggests a strengthening up-trend. Target for a breakout would be the 2010 high at 89*.
* Target calculation: 84 + ( 84 – 79 ) = 89
Crude Oil
Crude is range-bound, with Nymex WTI retreating after a false break above resistance at $98/barrel and Brent testing support at $100. The spread has narrowed to $6 and is likely to close further as the US economy recovers faster than Europe. Brent is in a down-trend, while Nymex continues to threaten a primary up-trend, reflecting the stronger US economy.
Commodities
The Dow Jones/UBS Commodity Index is falling hard, more in sympathy with gold than with crude, as the dollar strengthens. A rapidly weakening Chinese economy is likely to drag commodity prices even lower. Breakout below long-term support at 125/126 would offer a target of the 2009 low at 100*.
* Target calculation: 125 – ( 150 – 125 ) = 100