Gold & Commodities Archives - Page 67 of 78

April 4, 2012

Gold falls as the dollar rallies

The Dollar Index rallied to test resistance at 80.00. Breakout would indicate respect of the rising trendline and another primary advance. Recovery above 82 would confirm the target of 86*. Respect of the zero line by 63-day Twiggs Momentum would also strengthen the signal.

US Dollar Index

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot gold responded by testing support at $1600/ounce. Breach of the rising trendline would indicate that the long-term up-trend is weakening. Reversal of 63-day Twiggs Momentum below zero already warns of a primary down-trend. Recovery above $1700 is unlikely but would indicate respect of the rising trendline and continuation of the long-term up-trend.

Spot Gold

* Target calculation: 1550 – ( 1800 – 1550 ) = 1300

The Gold Bugs Index, representing un-hedged gold stocks, is in a clear primary down-trend since breaking support at 500. Peaks below zero on 63-day Twiggs Momentum also signal a strong down-trend. Spot gold is likely to follow unless the Fed changes course and announces further quantitative easing.

Gold Bugs Index

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.

March 29, 2012

Crude oil finds resistance while commodities weaken

Brent crude is consolidating in a narrow range below $125/$126 per barrel. Upward breakout is likely and would offer a long-term target of $150.

ICE Brent Afternoon Markers

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

Despite the weakening dollar, CRB Commodities Index is testing medium-term support at 310. Failure would indicate another test of primary support at 295. Breach of the long-term rising trendline would warn that the 4-year up-trend (similar to that of gold) is coming to an end. Recovery above 330 is as likely, however, and would signal the start of a primary advance, with a long-term target of 350.

CRB Commodities Index

* Target calculation: 325 + ( 325 – 295 ) = 355

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.

March 29, 2012

Gold and the Dollar both weaken

The Dollar Index is retracing to test primary support at 78.00 on the weekly chart. Respect of the rising trendline would signal continuation of the primary up-trend, while failure of support would warn of a down-trend to test support at 73.00. Reversal of 63-day Twiggs Momentum below zero would strengthen the bear warning.

US Dollar Index Weekly Chart

* Target calculation: 82 + ( 82 – 78 ) = 86

Despite the weakening dollar, spot gold is headed for the long-term rising trendline on the weekly chart. Failure of support at $1600/ounce would warn that the primary trend is weakening, while failure of $1500 would signal that the trend has reversed. Reversal of 63-day Twiggs Momentum into negative territory — for the second time recently after several years above zero — already warns of a primary down-trend.

Spot Gold Weekly Chart

* Target calculation: 1500 – ( 1800 – 1500 ) = 1200

The 4-hour chart shows gold respecting resistance at $1700 before retreating below medium-term support at $1670. Failure of short-term support at $1655 (the 0.618 Fibonacci retracement level) would test $1630 and signal continuation of the down-trend. Recovery above $1700 is unlikely but would signal respect of the long-term rising trendline (on the weekly chart above) and resumption of the primary up-trend.

Spot Gold 4-Hour Chart

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.

March 22, 2012

Gold Bugs warn of a primary down-trend

Amex Gold Bugs Index, representing un-hedged gold stocks, followed through below 480, after breaking primary support at 500, confirming a primary down-trend. Peaks below the zero line on 63-day Twiggs Momentum also signal a primary down-trend. The Gold Bugs index often acts as a leading indicator of trend changes in spot gold prices. Expect further weakness in the yellow metal; breach of support at $1500/ounce would confirm a primary down-trend.

Amex Gold Bugs 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.

March 22, 2012

Crude & Commodities

Crude oil is rising because of tensions over Iran, but commodities lag far behind, hurt by a stronger dollar and weak global demand. Brent crude is testing resistance at $125/$126 per barrel on the Weekly chart. Narrow consolidation is a bullish sign. Breakout would signal an advance to $150*.

ICE Brent Crude Afternoon Markers

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

The broader CRB Commodities Index, which includes 33 percent petroleum products, is testing medium-term support at 310. Failure would signal a test of primary support at 295, while respect would indicate a primary up-trend with an initial target of 355*.

CRB Commodities Index

* Target calculation: 325 + ( 325 – 295 ) = 355

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.

March 22, 2012

Gold correction continues

Spot gold found short-term support at $1640/ounce but is likely to continue its correction to test primary support at $1500. Reversal of 63-day Twiggs Momentum below zero, for the second time, threatens an iceberg top which would signal a primary down-trend. Breach of primary support at $1500 remains unlikely, but would signal a decline to $1200*.

Spot Gold

* Target calculation: 1700 – ( 1800 – 1700 ) = 1600; 1500 – ( 1800 – 1500 ) = 1200

The US Dollar continues in a primary up-trend, the Weekly chart showing the Dollar Index headed for another test of support at 78.00. Failure would warn that the trend is weakening, while respect would signal another attempt at 82.00

US Dollar Index

* Target calculation: 82 + ( 82 – 78 ) = 86

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.

March 20, 2012

BHP: China Iron Ore Demand 'Flattening Out' – WSJ.com

STEPHEN BELL: China’s demand for iron ore is ‘flattening out’, a senior executive at BHP Billiton Ltd. said Tuesday.

Demand growth for the commodity used to make steel will drop “to single digits if it is not already there,” Ian Ashby told a press conference in Perth.

via BHP: China Iron Ore Demand 'Flattening Out' – WSJ.com.

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.

March 19, 2012

Nouriel Roubini's Global EconoMonitor » Scary Oil

Nouriel Roubini: The last three global recessions (prior to 2008) were each caused by a geopolitical shock in the Middle East that led to a sharp spike in oil prices. The 1973 Yom Kippur War between Israel and the Arab states led to global stagflation (recession and inflation) in 1974-1975. The Iranian revolution in 1979 led to global stagflation in 1980-1982. And Iraq’s invasion of Kuwait in the summer of 1990 led to the global recession of 1990-1991.

Even the recent global recession, though triggered by a financial crisis, was exacerbated by spiking oil prices in 2008. With the barrel price reaching $145 in July of that year, oil-importing advanced economies and emerging markets alike faced a recessionary tipping point.

……..Oil is already well above $100/barrel, despite weak economic growth in advanced countries and many emerging markets. The fear premium might push prices significantly higher, even if no military conflict ultimately takes place, and could trigger a global recession if one does.

via EconoMonitor : Nouriel Roubini’s Global EconoMonitor » Scary Oil.

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.

March 15, 2012

Crude Oil & Commodities

Brent crude broke through resistance at $125/barrel on the Monthly chart, despite the strengthening dollar. Target for the advance is the 2008 high of $145.

ICE Brent Afternoon Markers

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

The broader CRB Commodities Index lags far behind. Breakout above 325 would signal an advance to 370*. But 63-day Twiggs Momentum remains below zero, indicating a primary down-trend, and reversal below the rising trendline would strengthen the signal. Failure of primary support at 290 would confirm.

CRB Commodities Index

* Target calculation: 330 + ( 330 – 290 ) = 370

March 14, 2012

Gold falls as the Dollar rises

The US Dollar Index broke resistance at 80 on the Weekly chart, signaling an advance to 82. The Index is already in a primary up-trend, as indicated by 63-day Twiggs Momentum above zero. Breakout above 82 would offer a target of 86*.

US Dollar Index

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot Gold followed through below last week’s low, indicating a correction to test primary support at 1500. Respect of the long-term rising trendline would indicate the primary up-trend is intact, but reversal of 63-day Twiggs Momentum below zero for a second time warns of a down-trend. Target for a down-trend would be 1200 to 1400*.

Spot Gold

* Target calculation: 1600 – ( 1800 – 1600 ) = 1400

The Hourly chart shows short-term support at 1635 and resistance at 1650. Failure of support would test 1600, while upward breakout from the trend channel would signal retracement to test the new resistance level.
Spot Gold