10-Year Treasury yields are headed for another test of 2.0%. Rising Trend Index peaks indicate buying pressure. Breakout would offer a target of 2.50% and further weaken demand for Gold (higher yields increase the opportunity cost of holding precious metals).
Gold continues to test support at $1450, while lower Trend Index peaks warn of selling pressure. Breach of support would offer a target of $1350/ounce.
Silver made a false break through support at $16.80/ounce but the overall pattern, with declining Trend Index peaks, remains bearish.
Australia
Australia’s All Ordinaries Gold Index continues in a downward trend channel. Declining Trend Index peaks warn of continued selling pressure but seem to be leveling off. Respect of support at 6000, accompanied by higher Trend Index troughs, would suggest that a base is forming. Breakout from the trend channel would strengthen the signal.
Patience
Gold is in a long-term up-trend and the current correction may offer an attractive entry point. But we first need a breakout from the trend channel to confirm that the up-trend is intact.
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.