Gold, measured in Australian Dollars, is in a bearish descending triangle, testing support at $2150/ounce. A sharp fall on the Trend Index, with a peak below zero, warns of strong selling pressure.
The All Ordinaries Gold Index recently broke support at 7200, warning of a decline to 6000. Again, a declining Trend Index warns of selling pressure.
Patience is required. Gold is in a long-term up-trend, with a target of the 2012 high at $1800/ounce. A correction may offer an attractive entry point but further falls are expected before the advance resumes.
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.