Crude futures (Light Crude January 2016 – CLF2016) broke primary support at $40/barrel, offering a target of $30/barrel*.
* Target calculation: 40 – ( 50 – 40 ) = 30
Gold: Told you so
Gold broke short-term support at $1065/ounce, confirming another (primary) decline. 13-Week Twiggs Momentum peaks below zero indicate a strong primary down-trend. Target for the decline is $1000/ounce*.
* Target calculation: 1100 – ( 1200 – 1100 ) = 1000
The Gold Bugs Index, representing un-hedged gold stocks, still has to break primary support at 105. But this now appears inevitable.
Crude testing support at $40/barrel
Crude futures (Light Crude January 2016 – CLF2016) are headed for another test of primary support at $40/barrel. Breach is likely and would signal another decline, with a target of $30/barrel*.
* Target calculation: 40 – ( 50 – 40 ) = 30
Gold: The final nail
Gold respected its new resistance level after a brief retracement and is again testing short-term support at $1065/ounce. 13-Week Twiggs Momentum peaks below zero indicate a strong primary down-trend. Breach of support is likely and would provide further confirmation of a decline to $1000/ounce*.
* Target calculation: 1100 – ( 1200 – 1100 ) = 1000
Spot silver has also broken long-term support, reinforcing the gold signal.
The Gold Bugs Index, representing un-hedged gold stocks, is testing primary support at 105. Failure of support is likely and would be the final nail in the coffin (for gold).
The stronger Dollar is weakening demand for gold, with the Dollar Index testing resistance its 12-year high at 100. Rising 13-week Twiggs Momentum indicates a healthy (primary) up-trend. Breakout above 100 is very likely and would signal an advance to 107*.
* Target calculation: 100 + ( 100 – 93 ) = 107
Crude futures target $32/barrel
Crude futures (Light Crude March 2016 – CLH2016) are consolidating in a narrow band below the former support level at $45/barrel. Breach of $43 is likely and would indicate a test of the August low at $41.20. Follow-through below $41 would warn of another decline, with a target of $32/barrel*.
* Target calculation: 42 – ( 52 – 42 ) = 32
Gold breaks support
Gold fell to $1070/ounce, breaching the band of primary support between $1080 and $1100 per ounce. 13-Week Twiggs Momentum peaks below zero indicate a strong primary down-trend. The next level of support is $1000/ounce*.
* Target calculation: 1100 – ( 1200 – 1100 ) = 1000
Inflation
Core CPI is close to the Fed target of 2.0 percent but inflation expectations continue to fall, with the 5-year breakeven rate (5-year Treasury minus 5-year TIPS yield) as low as 1.2 percent.
Interest Rates and the Dollar
Long-term interest rates are rising, anticipating a Fed rate hike. 10-Year Treasury yields retraced to test the new support level after breaking through 2.25 percent. Respect of support is likely and will signal an advance to 2.50 percent. Recovery of 13-week Twiggs Momentum above zero suggests an up-trend. Breakout above 2.50 percent would confirm.
Low inflation and a stronger Dollar are weakening demand for gold. The Dollar Index is testing resistance at 100. Respect of zero by 13-week Twiggs Momentum indicates long-term buying pressure. Breakout above 100 is likely and would signal an advance to 107*.
* Target calculation: 100 + ( 100 – 93 ) = 107
Crude tests $40/barrel
Crude futures (Light Crude December 2015 – CLZ2015) are testing primary support at $40/barrel. Breach is likely — and would signal a decline to $30*. Respect of support would indicate another bear rally.
* Target calculation: 40 – ( 50 – 40 ) = 30
Crude heading for $40/barrel
Crude futures (Light Crude December 2015 – CLZ2015) broke support at $44.70 per barrel, warning of another test of primary support at $40. Follow-through below $43 would confirm. Supply continues to exceed demand and breach of $40 would offer a (long-term) target of $30*. Recovery above $50 per barrel is most unlikely unless there is a serious disruption to supply.
* Target calculation: 40 – ( 50 – 40 ) = 30
Gold testing $1100/ounce
Solid job numbers have boosted the prospects for an interest rate hike before the end of the year. Employment is growing steadily, having exceeded its 2008 high by more than 4.2 million new jobs.
Unemployment is falling as job growth holds above 2.0 percent a year.
Interest Rates and the Dollar
Long-term interest rates are rising, with 10-year Treasury yields headed for a test of resistance at 2.50 percent after breaking through 2.25 percent. Recovery of 13-week Twiggs Momentum above zero indicates an up-trend. Breakout above 2.50 percent would confirm.
The Dollar strengthened in response to rising yields, the Dollar Index breaking resistance at 98. Respect of zero by 13-week Twiggs Momentum indicates long-term buying pressure. Breakout above 100 would confirm another advance, with a target of 107*.
* Target calculation: 100 + ( 100 – 93 ) = 107
Gold
Gold fell as the Dollar strengthened, testing primary support at $1100/ounce. 13-Week Twiggs Momentum peaks below zero indicate a strong (primary) down-trend. Follow-through below $1080 would signal another decline, with a target of $1000/ounce*.
* Target calculation: 1100 – ( 1200 – 1100 ) = 1000
Gold tremors
A strong dollar and low inflation weaken demand for gold. The spot metal broke medium-term support at $1150/ounce and is headed for a test of primary support at $1100. Another 13-week Twiggs Momentum peak below zero signals continuation of the primary down-trend.
* Target calculation: 1200 – ( 1400 – 1200 ) = 1000