Gold continues its decline since breaking medium-term support at $1280. Declining 13-week Twiggs Momentum below zero suggests a primary down-trend. Breach of primary support at $1240/ounce would confirm. Follow-through below $1180/$1200 would strengthen the bear signal. Respect of support at $1240 is unlikely, but recovery above $1280 would suggest that another bottom is forming.
* Target calculation: 1200 – ( 1400 – 1200 ) = 1000
Gold Bugs Index, representing un-hedged gold stocks, breach of support at 235 strengthens the bear signal for gold. Reversal of 13-week Twiggs Momentum below zero is also bearish.
The Dollar Index is testing resistance at 84.50/84.80. Recovery of 13-week Twiggs Momentum above zero reflects a primary up-trend. Expect retracement or consolidation at the resistance level, but breakout would signal another primary advance. Reversal below 81.50 remains unlikely. A rising dollar is likely to weaken demand for gold.
* Target calculation: 81.50 – ( 81.50 – 79.00 ) = 84.00