China’s Yuan continues to weaken while the Dollar index strengthens. Follow-through above 97 would signal another primary advance.
A strengthening Dollar would weaken demand for Gold. The bear rally is likely to meet stubborn resistance at $1250. Reversal below support at $1180 would warn of a decline to the 2015 low at $1050/ounce.
The monthly chart of Spot Silver also shows a strong down-trend, testing primary support at $13.50/ounce.
Crude oil is also showing signs of weakness, with a bearish divergence on the Trend Index. Breach of support at $65/barrel would warn of a primary down-trend.
In the long-term, gold and oil tend to rise and fall together.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.