Category: Gold & Commodities

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Commodities find resistance

Copper broke resistance at $8600/tonne; follow-through would signal continuation of the primary up-trend and point towards economic recovery. 63-Day Twiggs Momentum holding above zero strengthens the signal.

Copper Grade A

* Target calculation: 8000 + ( 8000 – 7200 ) = 8800

Brent Crude found resistance at $126/barrel — again while the dollar tests support. Breakout would offer a long-term target of $150*. Reversal below $115 is unlikely, but would warn of trend weakness.

ICE Brent Crude Afternoon Markers

* Target calculation: 125 + ( 125 – 100 ) = 150

The broader CRB Commodities Index is testing resistance at 325. Breakout would signal a primary advance to $350*, while recovery of  63-Day Twiggs Momentum above zero would strengthen the signal.

CRB Commodities Index

* Target calculation: 325 + ( 325 – 300 ) = 350

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Gold encounters resistance as Dollar finds support

Spot gold ran into resistance at $1800/ounce and is testing medium-term support at $1700. Recovery of 63-day Twiggs momentum above zero signals a primary up-trend but we will not have confirmation until there is a clear break through $1800.
Spot Gold

* Target calculation: 1800 + ( 1800 – 1500 ) = 2100

The Dollar Index is conversely testing support at 78.00. 63-Day Twiggs Momentum may be slowing but the dollar remains in a primary up-trend. Respect of support would signal continuation — and weaker demand for gold.

US Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

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Prepare for a golden age of gas – FT.com

Martin Wolf:

In its World Energy Outlook 2011, the IEA remarks that “[i]n all the scenarios examined … natural gas has a higher share of the global energy mix in 2035 than it does today”. Under its “golden age” scenario, gas demand grows by 2 per cent a year between 2009 and 2035. Even under a more cautious scenario, which it calls “new policies”, demand grows at 1.7 per cent a year or by a total of 55 per cent over this period. As a result, gas substitutes for other fuels, particularly in electricity generation and heating. Gas also has substantial potential as a fuel for transportation. Overall, argues BP in its latest Energy Outlook, by 2030 gas might come to rival coal and oil as a primary energy source.

via Prepare for a golden age of gas – FT.com.

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Crude drags commodities higher

Brent crude is headed for a test of its 2011 high at $126/barrel as tensions with Iran escalate. Upward breakout would offer a long-term target of $150*. A trough above the zero line on 63-day Twiggs Momentum reflects the strong up-trend.

ICE Brent Afternoon Crude Markers

* Target calculation: 125 + ( 125 – 100 ) = 150

The CRB Commodities Index is being boosted by rising crude prices, petroleum-based products making up a third of the index weighting. The index itself is testing resistance at 325, while 63-day Twiggs Momentum is at the zero line. Breakout above 325 would signal a primary up-trend with an initial target of 350*.

CBR Commodities Index

* Target calculation: 325 + ( 325 – 300 ) = 350

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Gold tests $1800/ounce

Spot gold is testing resistance at $1800/ounce on the weekly chart after completing a small flag to signal continuation of the up-trend. Breakout would signal a primary advance to $2100*. Respect of the zero line by 63-day Twiggs Momentum would strengthen the signal.

Spot Gold

* Target calculation: 1800 + (1800 – 1500 ) = 2100

The US Dollar Index remains weak as inflation expectations rise. Failure of medium-term support at 78.50 would warn of trend weakness, while recovery above 80.00 would indicate trend strength. Target for a breakout above 81.50 would be 85.00*.

US Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

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Commodities: Crude rises on Iran tensions

Brent Crude is advancing towards its target of $130/barrel* after breaking resistance at $115. Respect of the zero line by the last trough on 63-day Twiggs Momentum strengthens the bull signal.

Brent Afternoon Markers

* Target calculation: 115 + ( 115 – 100 ) = 130

The broader CRB Commodities Index breached its descending trendline but continues to display uncertainty. Breakout above 325 would signal a primary up-trend with an initial target of 350*. A stronger dollar is likely to retard commodity prices.

CRB Commodities Index

* Target calculation: 325 + ( 325 – 300 ) = 350

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Gold hesitates on dollar strength

Spot gold displays a small flag consolidation, suggesting continuation of the advance to test $1800/ounce. Breach of the descending trendline indicates that the down-trend has ended and breakout above $1800 would signal an advance to $2100*. Respect of the zero line by 63-day Twiggs Momentum would strengthen the signal. A strengthening dollar, however, would weaken demand for gold.
Spot Gold

* Target calculation: 1800 + ( 1800 – 1500 ) = 2100

The US Dollar Index found support above 78. Recovery above 80 would indicate another test of resistance at 82. Rising 63-day Twiggs Momentum continues to signal a strong up-trend. Breakout above 82 would confirm the target of 85*.

US Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

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Commodities: Copper and crude rise for different reasons

Copper continues in a primary up-trend, driven by speculative demand with a weakening dollar and anticipation of a US recovery. Retracement that respects support at 8000 on the weekly chart would strengthen the signal.

Grade A Copper


Brent Crude broke resistance at $115/barrel for altogether different reasons. Further disruption of supplies from Nigeria and heightened tensions as the US increases pressure on Iran raise concerns about future supply. Expect retracement to test the new support level; respect would confirm a new primary up-trend.

Brent Crude

* Target calculation: 115 + ( 115 – 100 ) = 130

The broader CRB Commodities Index has breached its declining trendline, but proceeds at a slower pace. Breakout above 325 would signal the start of a primary up-trend, with an initial target of 350*. Recovery of 63-day Twiggs Momentum above zero would strengthen the bull signal.

CRB Commodities Index

* Target calculation: 325 + ( 325 – 300 ) = 350

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Gold up-trend not yet confirmed

Spot gold is consolidating below resistance at $1800. Until we have a breakout there is no confirmation that gold has started a new up-trend. Reversal of 63-day Twiggs Momentum below zero would warn indicate weakness.

Spot Gold

* Target calculation: 1800 + ( 1800 -1500 ) = 2100

US Dollar Index continues to decline, boosting gold and commodities. Respect of the rising trendline would confirm the primary up-trend — as would a trough on 63-day Twiggs Momentum that finishes above the zero line.

US Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

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Brent oil on tear with Iran sanctions, Europe winters – Commodities – Futures Magazine

PHIL FLYNN: The Brent crude versus WTI spread has blown out to the highest levels since last October surging over $20 on a combination of gluts, cuts and nuts. As U.S. refiners go into hibernation against a backdrop of weak demand, supply in the U.S. continues to rise. Refiners are cutting runs dramatically at a time when we are seeing rising Canadian oil sand production as well as shale liquids that is creating a glut of crude that seems to be getting more glutinous by the minute. Weak refining margins and the approaching shoulder season are weighing in on the West Texas Intermediate.

On the other hand, Europe scrambles as fears that the nuts in Iran may do something crazy in response to the tightening economic noose around their necks. Add to that a wickedly cold winter and Asian refiners hoarding supply, and we have Brent crude on a tear….

via Brent oil on tear with Iran sanctions, Europe winters – Commodities – Futures Magazine.

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