Gold & Commodities Archives - Page 59 of 76

January 17, 2013

Gold and the dollar

Gold is undergoing a correction on the weekly chart. Declining momentum and breach of the long-term rising trendline suggest that the 5-year bull-trend is ending, but recovery above $1700 per ounce would indicate one more attempt at $1800 resistance. Respect of $1700, however, would indicate a test of primary support at the May 2012 low at $1525.

Spot Gold

The Dollar Index respected resistance at 81 and is likely to re-test primary support at 78.50. Twiggs Momentum oscillating below zero already indicates a primary down-trend — confirmed if primary support is broken. Recovery above 81.50 remains unlikely, but would indicate an advance to 84.

US Dollar Index

* Target calculation: 78.5 – ( 81.5 – 78.5 ) = 75.5

Colin Twiggs

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.

December 6, 2012

Goldman predicts falling commodity prices

Matthew Boesler writes that Jeffrey Currie, Goldman Sachs Head of Commodity Research, in his investment outlook for 2013, says commodity prices may be done going up, but that doesn’t mean investors can’t still make money.

Currie’s explanation is this: sustained high prices over the past decade have caused producers to invest in new technologies that help them to harvest more commodities, because they can sell them in the current market for high prices. However, those new technologies have the effect of relieving long-term supply constraints, because the world will be able to use them to access previously unaccessable energy resources, shale oil being just one example.

If Currie is right, returns will be “generated more by the backwardation in the term structure and less by price appreciation”. That means that investors can profit from rolling current contracts into consecutively cheaper future contracts. But it also means a bear market in resources stocks as commodity prices fall.

via GOLDMAN: The 'Old Economy Renaissance' Is About To Offer Opportunities For Commodity Investors Not Seen Since The 1990s – Business Insider.

Colin Twiggs

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.

December 5, 2012

Weaker commodities threaten down-turn

Commodities remain weak despite the softer dollar, with the DJ-UBS Commodity Index hovering above support at 140 on the weekly chart. Breach of support would test the primary level at 125/126, warning of a global economic down-turn. Reversal of 63-day Twiggs Momentum below zero would also suggest a down-trend.

DJ-UBS Commodity Index

The gap between Nymex WTI Light Crude and ICE Brent Crude Middle East widened to $24/barrel as a result of tensions in the Middle East. 63-Day Twiggs Momentum holding below zero suggests a primary down-trend despite the weaker dollar.

Nymex WTI Light Crude

Colin Twiggs

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.

December 5, 2012

Gold breaks $1700

Gold broke support at $1700 per ounce, indicating a test of primary support at $1675. Breakout would offer an initial target of $1600*, with a long-term target of the May 2012 low at $1525. Declining 63-day Twiggs Momentum indicates weakness but values above zero still reflect a primary up-trend and the weakening dollar suggests strong support.

Spot Gold

* Target calculation: 1675 – ( 1750 – 1675 ) = 1600

The Dollar Index broke medium-term support at 80 on the weekly chart while the dollar is approaching its September low against the euro. The 63-day Twiggs Momentum peak below zero indicates a primary down-trend — confirmed if primary support at 78.50 is broken. Recovery above 81.50 is most unlikely but would indicate an advance to 84.

US Dollar Index

* Target calculation: 78.5 – ( 81.5 – 78.5 ) = 75.5

The daily chart shows retracement to confirm resistance at 80.

US Dollar Index

Colin Twiggs

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.

December 2, 2012

Why is Australia paying Japanese prices for natural gas?

Australian-born chairman and CEO of the Dow Chemical Company, Andrew Liveris, talks with Alan Kohler on ABC Inside Business about the US fiscal cliff and why Australia needs a cohesive energy policy.

“We have to create an infrastructure such that we can have gas-on-gas on competition domestically. If you build the infrastructure, and private sector can do it, and allow shared pipelines, if you build it you will get a domestic gas system and a pricing system that defies the oil gas parity pricing that countries like Australia should never have. If you have the resource in your country, you shouldn’t be paying the highest alternative price of the country that doesn’t have the resource. Why are we paying Japan energy prices when we have domestic gases?”

Colin Twiggs

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.

November 29, 2012

Gold long tail as dollar retreats

Yesterday’s long tail on the spot gold daily chart indicates support at $1700 per ounce. Recovery above $1750 would signal another test of $1800. 63-Day Twiggs Momentum well above zero continues to indicate a healthy up-trend. A weakening dollar would strengthen the signal.

Spot Gold

* Target calculation: 1800 + ( 1800 – 1700 ) = 1900

The Dollar Index (weekly chart) is testing medium-term support at 80. Failure would threaten a head-and-shoulders reversal. Breach of primary support at 78.50 would offer a target of 74*. 63-Day Twiggs Momentum holding below zero already suggests a primary down-trend. Recovery above 81.50 is unlikely but would indicate an advance to 84.

US Dollar Index

* Target calculation: 79 – ( 84 – 79 ) = 74

The DJ-UBS Commodity Index (weekly chart) respected support at 140, helped by the weaker dollar. 63-Day Twiggs Momentum above zero suggests a primary up-trend but reversal would re-test primary support at 126.

DJ-UBS Commodity Index

Nymex WTI Light Crude and ICE Brent Crude both trend downwards but the gap between the two is widening. Middle East tensions affect Brent Crude supply more than its West Texas cousin. 63-Day Twiggs Momentum holding below zero warns of a primary down-trend. Breach of primary support would confirm: WTI at $78 per barrel and Brent Crude at $90.

Nymex WTI Light Crude

Colin Twiggs

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.

November 22, 2012

Gold strengthens as dollar retreats

Long tails on the last two days of the spot gold daily chart indicate strong support at $1700 per ounce. Breakout above $1740 would indicate another test of $1800. 63-Day Twiggs Momentum well above zero suggests a healthy up-trend. A weakening dollar would strengthen the signal.

Spot Gold

* Target calculation: 1800 + ( 1800 – 1700 ) = 1900

The Dollar Index (weekly chart) retreated below resistance at 81. Follow-through below 80 would test primary support at 78.50, while failure of primary support would complete a head-and-shoulders reversal with a target of 74*. 63-Day Twiggs Momentum holding below zero already suggests a primary down-trend. Breakout above 81.50 is unlikely but would indicate an advance to 84.

US Dollar Index

* Target calculation: 79 – ( 84 – 79 ) = 74

The DJ-UBS Commodity Index (weekly chart) respected support at 140. The 63-day Twiggs Momentum trough above zero suggests a primary up-trend. A weakening dollar would strengthen the signal, while breakout above 152 would confirm. Breach of 140 is unlikely but would test primary support at 126.

DJ-UBS Commodity Index

Nymex WTI Light Crude and ICE Brent Crude are both trending downward. The 63-day Twiggs Momentum peak at zero warns of a primary down-trend. Breach of primary support would confirm: WTI at $78 per barrel and Brent Crude at $90.

Nymex WTI Light Crude

Colin Twiggs

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.

November 16, 2012

The Gold-Euro-Dollar conundrum Part II

Last week we discussed conflicting signals from the euro and US dollar. The Dollar Index and the euro are normally plotted inversely to each other. I have reversed this on the chart below. As expected, with the euro the largest component (57.6 percent) of the dollar index weighted basket of currencies, there is a strong correlation. Divergences between the two seldom last as traders “arbitrage” the differences.

The rising Dollar Index is testing resistance at 81.50. Respect of resistance would threaten a head-and-shoulders reversal — with a target of 74* — following a breakout below primary support at 78.50. Falling 63-day Twiggs Momentum, below zero, already suggests a primary down-trend. But recovery above 81.50/82.00 would negate this, indicating another primary advance.

US Dollar Index

* Target calculation: 79 – ( 84 – 79 ) = 74

Spot gold (daily chart) is testing short-term support at $1700 per ounce. Respect of support would reinforce the earlier trendline break, suggesting another test of $1800. But a stronger dollar and failure of support at $1675 would indicate a more severe correction.

Spot Gold

* Target calculation: 1800 + ( 1800 – 1700 ) = 1900

The DJ-UBS Commodity Index (weekly chart) continues to test support at 140. A 63-day Twiggs Momentum trough above zero would indicate a primary up-trend. Recovery above 152 would confirm. A stronger dollar and breach of 140, however, would test primary support at 126.

DJ-UBS Commodity Index

Nymex WTI Light Crude and ICE Brent Crude are both headed for a test of primary support: WTI at $76/$78 per barrel and Brent Crude at $90. The 63-day Twiggs Momentum peak below zero warns of a primary down-trend.

Nymex WTI Light Crude

Colin Twiggs

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.

November 8, 2012

The Gold-Euro-Dollar conundrum

The Euro broke support at $1.28 against the greenback (weekly chart). Respect of the descending trendline warns of a down-swing to test primary support at $1.20. Reversal of 63-day Twiggs Momentum below zero would strengthen the signal. But the Dollar Index and Gold suggest the opposite. Recovery above $1.28 would indicate a bear trap.
Euro

The Dollar Index is inversely rising to test resistance at 81/81.50. Breakout would indicate another test of 84.00 but 63-Day Twiggs Momentum below zero warns of a primary down-trend. Rising gold also suggests dollar weakness. Reversal below support at 78.50 would complete a head-and-shoulders reversal with a target of 74*.

US Dollar Index

* Target calculation: 79 – ( 84 – 79 ) = 74

Spot gold (daily chart) broke resistance at $1725 per ounce, signaling an advance to $1900*. The 63-day Twiggs Momentum trough above zero indicates a primary up-trend. Breakout above $1800 would confirm. The conundrum is the euro is weakening and dollar index strengthening but gold is rising rather than weakening as expected.

Spot Gold

* Target calculation: 1800 + ( 1800 – 1700 ) = 1900

The DJ-UBS Commodity Index (weekly chart) found support at 140. 63-Day Twiggs Momentum is testing zero. Respect would indicate a primary up-trend. Recovery above $1.52 would confirm. Breach of $140, however, and 63-day Twiggs Momentum below zero, resulting from a strengthening dollar and/or global down-turn, would test primary support at 126.

DJ-UBS Commodity Index

Nymex WTI Light Crude is headed for a test of primary support at $76/$78 per barrel. Declining 63-day Twiggs Momentum, below zero, warns of a primary down-trend. Brent Crude is also weakening, headed for test of primary support at $90.

Nymex WTI Light Crude

Colin Twiggs

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.

November 8, 2012

Dollar Index

The Dollar Index is testing resistance at 81/81.50. Breakout would indicate another test of 84.00. But 63-day Twiggs Momentum below zero warns of a primary down-trend. Breach of support at 78.50 would complete a head-and-shoulders reversal with a target of 74*.

US Dollar Index

* Target calculation: 79 – ( 84 – 79 ) = 74

Colin Twiggs

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.