Falling crude prices have helped to strengthen the Dollar. Nymex Light Crude found support at $50/barrel, helped by an OPEC production cut, but the organization does not have the sway it once had. A test of $45/barrel is likely.
The Dollar Index closed above 97, signaling an advance to 100 in the medium-term (next quarter). Penetration of the descending trendline on the Trend Index would strengthen the signal.
Gold is likely to test support at $1180/ounce. Breach would warn of a decline to $1050/ounce (the 2015 low).
Silver is testing long-term support at $14/ounce. Breach would offer a target of $10 but would also warn of similar weakness for Gold.
The All Ordinaries Gold Index is consolidating between 4500 and 5500, buoyed by a weaker Australian Dollar. But Gold is more volatile than the Aussie Dollar and further weakness is expected. Bearish divergence on the Trend Index warns of selling pressure. Breach of 4500 would signal a primary decline.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
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.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.