Category: Gold & Commodities

Posted on

Gold and the $1200 ‘support’ level

Barrick Gold failed to break resistance at 13.50 and looks set to continue ranging between 10.00 and 13.50. The consolidation is not an indication of reversal in the primary down-trend.

Barrick Gold

Inflation-adjusted price of gold (USD price divided by US consumer price index) is well above its historic long-term average, indicating that the bear trend is likely to continue.

Spot Gold

On the daily chart spot gold recovered from its March test of primary support at $1140, but has encountered strong resistance around $1200/ounce. 13-Week Twiggs Momentum continues to oscillate below zero, suggesting continuation of the primary down-trend. Reversal below $1180 would warn of another test of $1140, while breach of the primary support level would signal a decline to $1000/ounce*. Breakout above $1220 is unlikely, but would signal a (bear) rally to $1300/ounce.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

Posted on

Gold ‘Barricks’ upward

Stewart Thomson on SafeHaven suggests that Barrick Gold is about to break its 4-year down-trend and that spot gold is likely to follow.

Barrick Gold

Barrick Gold (ABX) has been ranging between 10.00 and 13.50 for the last 6 months. The long-term descending trendline is penetrated, but movement is more sideways than upward. 13-Week Twiggs Money Flow recovery to above zero is a recurring pattern suggesting a secondary, bear rally rather than a primary reversal; only a significant trough above zero would indicate otherwise. Breakout above 13.50 would indicate a rally, but is likely to encounter resistance between 16.00 and 21.00. A correction that respects the new support level (at 13.50) is unlikely, but would signal a primary reversal.

Gold has similarly consolidated between $1140 and $1300, shown here on a monthly chart. Recovery above $1200/ounce suggests a test of $1300, but 13-week Twiggs Momentum remains negative and we are unlikely to see a reversal with current low inflation. Breach of primary support at $1140 remains a stronger possibility and would signal a decline to $1000/ounce*.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

Posted on

Gold retreats

Gold retreated below support at $1200/ounce. Follow-through below $1180 would indicate another test of primary support at $1140/$1150. Breakout above $1220/ounce is now unlikely. A 13-week Twiggs Momentum peak below zero warns of a primary down-trend. Breach of primary support would signal a decline to $1000/ounce.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

Posted on

Gold Dollar pause

Long-term Treasury yields remain in a bear trend, with 10-year yields holding below resistance at 2.00%. Breach of support at 1.85% would signal another test of the primary level at 1.65%. A lower inflation outlook is translating into lower interest rate expectations.

10-Year Treasury Yields

The Dollar Index is likewise encountering resistance at 100. Breakout would signal an advance to 104*. Reversal below 96, however, would test primary support at 94.

Dollar Index

* Target calculation: 100 + ( 100 – 96 ) = 104

Gold is also consolidating, ranging between $1180 and $1220/ounce. Reversal below $1180 would signal a decline to $1000/ounce*, while breakout above $1220 would indicate a rally to $1300/ounce.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

Posted on

Crude breakout: exercise caution

Nymex Light Crude broke resistance at $55/barrel, signaling the end of the narrow consolidation of the past few months. Some have heralded this as the end of the bear trend and start of a bull market.

Brent Crude and Nymex WTI Light Crude

If we examine the recent consolidation — shown here on June 2015 Light Crude futures — it is clear that it is broadening, with the second trough below the first, rather than rectangular. Peaks are likely to follow a similar pattern; so a higher peak does not necessarily mean a breakout. Broadening wedges tend to be unreliable reversal signals and I would wait for retracement that respects the new support level at $55 to confirm the breakout.

Nymex WTI Light Crude June 2015 Futures

Posted on

Upsurge in global trade?

While commodity prices are tanking, with iron ore now trading below $50 per tonne, there are signs that international shipping of manufactured goods is on the increase. Shipbrokers Harper Petersen publish the Harpex, a weekly index of charter rates for container vessels. The recent up-turn reflects increased demand for container shipping — an important barometer of international trade.

Harpex Index

Posted on

Dollar double bottom — gold tests support

Apologies for my recent absence. I seem to take longer to recover from a ‘flu virus than I used to. The Dollar Index, however, has made a robust recovery, breaking resistance at 98.50. Completion of a double-bottom suggests a new advance with a target of 104*.

Dollar Index

* Target calculation: 100 + ( 100 – 96 ) = 104

Gold retreated below its former primary support level of $1200/ounce as the dollar strengthened. Breach of the rising trendline suggests the bear rally is over; follow-through below $1180 would confirm, strengthening the long-term target of $1000/ounce*.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

Posted on

Gold tests resistance as the dollar falls

Ten-year Treasury Note yields are testing support at 1.85% after consolidating below 2.00% for 2 weeks. 13-Week Twiggs Momentum below zero continues to indicate a primary down-trend. Failure of support at 1.85% would test primary support at 1.65%.

10-Year Treasury Yields

Correction on the Dollar Index has lasted 3 weeks but continues to respect the first line of support at 95.50. Rising 13-week Twiggs Momentum also continues to indicate a strong (primary) up-trend. Recovery above 100 is likely and would offer a target of 110*.

Dollar Index

* Target calculation: 100 + ( 100 – 90 ) = 110

Gold is testing resistance at $1200/ounce on the back of softer interest rates and a weak dollar. Breakout above $1220/ounce would indicate a rally to $1300. But 13-week Twiggs Momentum below zero continues to indicate a primary down-trend. Respect of $1300, or reversal below $1180 would suggest another test of primary support at $1140/$1150.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

Posted on

The state of crude

Crude is consolidating in a narrow band between $44 and $55/barrel. Supply continues to exceed demand and storage facilities are approaching capacity. The bear trend is expected to continue. Failure of support at $44/barrel would confirm.

Brent Crude and Nymex WTI Light Crude

Posted on

Gold hesitant response to weak Dollar

Ten-year Treasury Note yields are re-testing resistance at 2.00%. Recovery above 2.25% would indicate the correction is over and a rally to test the key resistance level of 3.00%. 13-Week Twiggs Momentum below zero, however, continues to indicate a primary down-trend. Failure of support at 1.85% would signal a test of 1.65%.

10-Year Treasury Yields

The Dollar retreated from long-term resistance at 100 as expectations of higher interest rates eased. Rising 13-week Twiggs Momentum signals a strong (primary) up-trend. Respect of support at 95.5 would confirm.

Dollar Index

* Target calculation: 100 + ( 100 – 90 ) = 110

Gold rallied on the back of a soft dollar and weak interest rate outlook, but failed to hold above $1200/ounce. 13-Week Twiggs Momentum below zero continues to indicate a primary down-trend. Follow-through below $1180 would warn of another test of support at $1140/$1150, while a rise above $1220 would test $1300.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

Powered by WordPress / WordPress Maintenance Service By Website Helper