The Dollar Index is testing primary support between 92 and 93; bullish for gold. Breach of support would offer a long-term target between 83 and 84*.
*Target: 93 – ( 103 – 93 ) = 83
Crude rallied strongly this week, with Nymex light crude testing its upper trend channel at $50/barrel. Respect would indicate another test of the lower trend channel, around $40/barrel, continuing the primary down-trend. Follow-through above $50 would suggest that a bottom has formed and the next correction is unlikely to reach the last low of $42.
Gold followed through above $1260 after a brief retracement, indicating another test of $1300. Reversal below $1250 is unlikely but would be a bearish sign, warning of another test of primary support.
The accompanying rally in Silver is testing the descending trendline at $17/ounce. Penetration would suggest that a bottom is forming and the primary down-trend is near an end; a bullish sign for gold.
