Low interest rates increase demand for gold by lowering the carrying cost. A rising dollar, however, has the opposite effect.
Gold respected resistance at $1250/ounce, confirming the primary down-trend. Another 13-week Twiggs Momentum peak below zero strengthens the signal. Breach of primary support at $1180 would offer a long-term target of $1000*. Recovery above 1250 is unlikely, but would test the descending trendline around $1300.
* Target calculation: 1200 – ( 1400 – 1200 ) = 1000
Gold Bugs Index, representing un-hedged gold stocks, fell sharply since breaching long-term support at 190. Declining 13-week Twiggs Momentum (below zero) signals a strong primary decline. Bearish for gold.
The price of gold adjusted for inflation (gold/CPI) remains relatively high and further falls are likely.
Re: AUDUSD
Just having a look at A6Z14 (AUD Futures) …
Is that a bearish pennant I see forming?
From the recent High c93.30 to the low c86.50 there appears to be an upward facing (narrowing) pennant.
I do not believe it is going to break to the upside – so that suggests a bull trap downside break with a target of sub 80.
Commodities do not appear to be in a rally pre Xmas move, so little AUD suuport there.
Any thoughts?