Spot gold encountered short-term support at $1300/ounce, but the correction is far from over. A rally would be likely to encounter resistance at $1350, while failure would test $1275. Respect of $1275 would be bullish, but the primary trend is downward and another test of support at $1200 remains likely. Declining 13-week Twiggs Momentum, while below zero, strengthens the signal.
Rising Treasury yields increase the opportunity cost of holding precious metals, driving gold prices down. The yield on ten-year notes is testing support at 2.70 percent, but respect is likely, offering a medium-term target of 3.30 percent.
* Target calculation: 3.00 + ( 3.00 – 2.70 ) = 3.30
Crude Oil
Nymex and Brent crude are easing as prospect of US intervention in Syria fades. Breach of support at $103/barrel — and the rising trendline — is unlikely, but would test medium-term support at $98/barrel.
* Target calculation: 108 + ( 108 – 98 ) = 118
Commodities
A retreating Shanghai Composite Index followed commodity prices lower, with another test of primary support at 124 by Dow Jones-UBS Commodity Index more likely. 13-Week Twiggs Momentum below zero continues to indicate a (primary) down-trend and another peak below the line would strengthen the signal. Recovery above 130, however, would confirm the earlier double-bottom reversal and a primary up-trend.
* Target calculation: 130 + ( 130 – 125 ) = 135