The US Dollar Index $DXY_us.
The Dollar continues to test resistance at 97.50, threatening a breakout. A strengthening Dollar weakens demand for Gold.
Spot Gold has formed a descending triangle, testing medium-term support at $1280/ounce. The bearish formation and declining Trend Index warn of selling pressure. Breach of $1280 would offer a target of primary support at $1180.
Silver is likewise testing medium-term support at $15/ounce, warning of a decline to $14.
The Dollar is again testing resistance at 97.50, threatening a breakout.
Spot Gold is testing medium-term support at $1280/ounce. Declining Trend Index peaks warn of selling pressure. Breach of $1280 would offer a target of primary support at $1180.
Silver is likewise testing medium-term support at $15/ounce, warning of a decline to $14.
The Dollar is expected to continue ranging between 95 and 97.50 over the next few months.
Spot Gold bounced off intermediate support at $1280/ounce but short candles over the past three weeks warn of selling pressure. Breach of $1280 would warn of another test of primary support at $1180.
The Dollar retreated from resistance at 97.50 and is likely to test support at 95.50.
Spot Gold, however, continues to test short-term support at $1300/ounce. Breach is likely and would warn of another test of primary support at $1180.
The Dollar is testing resistance at 97.50 after poor progress in US-China trade talks. Breakout would signal an advance to 100 which would be bearish for gold.
Spot Gold found short-term support at $1300/ounce. Expect a test of support at $1250 but a fresh Dollar advance would threaten primary support at $1180.
Spot Gold retreated from resistance at $1350/ounce. Penetration of the rising trendline warns of another correction. The immediate target is support at $1250.
Silver is also retreating. Breach of $15/ounce would strengthen the bear signal.
Crude oil has rallied since the start of the year but the primary trend is down and lower peaks on the trend index warn of further selling pressure. Breach of medium-term support at $52 would signal another test of primary support at $42 which would be bullish for the Dollar.
The Dollar is gradually strengthening. Breakout of the Dollar Index above its current range of 95.50 to 97.50 would be bearish for gold.
The Aussie Dollar held steady, while the All Ordinaries Gold Index retreated from its recent high above 6000. Expect a test of new support at 5400.
A long-term (monthly) chart shows Crude Oil (WTI Light Crude) has broken below its trend channel and is testing support at $45/barrel.
Weak crude tends to coincide with a strong Dollar. Breakout of the Dollar index above 97 is likely. Rising Trend index troughs indicate buying pressure.
Gold is headed for another test of resistance at $1350/ounce but a strong Dollar is likely to undermine a primary advance.
The All Ordinaries Gold Index broke resistance at 5400/5500, signaling a primary advance with a target of 7000. That will depend on further weakness in the Aussie Dollar and/or a stronger gold price.
Conclusion: We are witnessing a rally in Gold due to global uncertainty but the LT outlook, with declining crude and a stronger Dollar, is still bearish.
Crude Oil (WTI Light Crude) respected support at $45/barrel, with turmoil in Venezuela raising concerns over supply. Breakout above $55 would signal another rally but declining peaks on the Trend Index warn of selling pressure. Expect another test of $45. Breach of support would signal a decline to test the 2016 low at $26/barrel.
The Dollar index is weakening. If China continues to support the Yuan, we may see a correction to test support at 92. A lot will depend on trade talks in the next two weeks but I expect continued Dollar strength and Yuan weakness.
The PBOC increased support for the Yuan over the last month, leading up to the US-China trade talks, causing the Dollar to weaken.
Gold has ranged below resistance at $1350/ounce for the past five years. Expect another test of $1350 if the Dollar weakens. Breakout would signal a primary up-trend but LT Dollar strength is likely ….and a correction to test support at $1200.
A weakening Australian Dollar has helped Aussie gold stocks. The All Ordinaries Gold Index broke resistance at 5400, signaling a primary advance with a target of 7000. But that depends on further weakness in the Aussie Dollar (< 70 US cents?) and/or a stronger gold price (> $1350?)
Conclusion: We are witnessing a rally in Gold due to global uncertainty but the LT outlook, with declining crude and a stronger Dollar, is bearish.
Gold is testing resistance at $1300/ounce and is likely to follow-through to the long-term (LT) ceiling at $1350. Trend Index on the LT monthly chart displays a large triangular consolidation, indicating uncertainty. Upward breakout would signal a primary up-trend but this is unlikely, for three reasons. First, this is a bear market. A decline is more likely for that reason alone. Target for a decline is the 2015 low at $1050/ounce.
Second, a strengthening Dollar is likely to weaken Gold. I have inverted the LT chart of the Dollar Index (and Trend Index) below so that it is easier to relate to gold. As the Dollar strengthened, denoted by a LT fall on the inverted chart, Gold has weakened. The Dollar index shows a broadening consolidation since 2015, with bull and bear traps, again indicating uncertainty. At present, the Dollar is testing resistance at 97 but is likely to follow through to test LT resistance at 100. Rising Trend Index troughs above zero (remember the scale is inverted) signal buying pressure.
Third, falling Crude Oil prices are bearish for Gold. The LT chart below compares spot crude to spot gold, both adjusted for inflation to bring earlier peaks into proper perspective. The LT relationship is clear: gold and crude tend to rise and fall together. Crude prices have recently tumbled, exerting downward pressure on Gold.
Conclusion: We are witnessing a rally in Gold because of global uncertainty but the LT outlook is bearish.
Falling crude prices show a dead cat bounce at $50/barrel, warning of further selling pressure. OPEC production cuts have not helped much as the market anticipates slowing demand from China.
The Dollar Index is strengthening, with Trend Index troughs above zero signaling buying pressure. Follow-through above 97.50 would signal an advance to 100 in the medium-term (next quarter).
Gold rallied to test resistance at $1250/ounce but this is still a bear rally and another test of support at $1180 is likely. Breach would warn of a decline to the 2015 low at $1050/ounce.
The All Ordinaries Gold Index ran into strong resistance at 5100. Declining Trend Index peaks warn of selling pressure. Breach of 4900 would warn of another test of 4550.
