Gold rallied off support at $1450, testing resistance at $1500/$1520. Lower Trend Index peaks continue to warn of long-term selling pressure and another test of support at $1450 is likely.
Silver is similarly testing resistance at $18.00/ounce, while declining Trend Index peaks warn of LT selling pressure. Expect another test of support at $16.50.
China’s Yuan is testing resistance at 14.35 US cents, while rising Trend Index troughs suggest buying pressure. Expect retracement to test support but the LT outlook is more bullish.
The Dollar Index, which should behave inversely to the Yuan (CNYUSD) above, is headed for a test of primary support at 96. Breach would be a strong bear signal.
A weakening Dollar is a bull signal for Gold but it is driving up Treasury yields — raising the opportunity cost of holding precious metals — which is likely to offset rising demand.
10-Year Treasury yields are testing resistance at 2.0%. Breakout would offer a target of 2.50%.
Australia
Australia’s All Ordinaries Gold Index is testing the upper border of its downward trend channel. Declining Trend Index peaks have leveled off, suggesting that selling pressure is easing. Expect another test of support at 6000; respect would signal 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 clear breakout from the trend channel to confirm that the up-trend is intact.