Gold & Commodities Archives - Page 70 of 74

October 17, 2011

Terms of trade shock brewing? – macrobusiness.com.au

As a simple exercise to give you some idea of where we’re headed, let’s refer to Rumplestatskin this morning, who shows that iron ore alone represents almost 30% of the export basket that makes up the terms of trade. Coal makes up another large component above 20%:

……So, if we use the conservative Westpac projection of a 16% fall in the value of iron ore and a 5% fall in value of total coal exports (which is obviously a very conservative guess because we don’t know the coking coal weighting), that would translate to a terms of trade fall around 12% in January next year.

via Terms of trade shock brewing? – macrobusiness.com.au | macrobusiness.com.au.

October 17, 2011

Westpac Economic update – Spot iron prices falling

Spot iron ore prices have fallen quite sharply over the last 2 weeks, down 8% to $158/t. In the last 4 weeks, Australian spot fines, as measured by the TSI, are down almost 12% landed in China.

Westpac forecast spot prices of around US$140/t by mid 2012.

October 13, 2011

Crude and commodities rally

Brent Crude rallied off support at $99/$100 per barrel, headed for a test of the upper trend channel. 63-Day Twiggs Momentum above its descending trendline warns that the down-trend is weakening. Breakout above the upper channel would test the 2011 high of $125/barrel.

Brent Crude

CRB Commodities Index similarly rallied off support at 300. 63-Day Twiggs Momentum is still declining and failure to reach the upper trend channel (on the price chart) would warn of an accelerating down-trend.

CRB Commodities Index

October 12, 2011

Gold miners’ broadening wedge

Amex Gold Bugs Index continues in a broadening wedge formation. Downward breakouts occur 66% of the time, according to Thomas Bulkowski. Failure of support at 500 would offer a target of 370*.

Amex Gold Bugs Index

* Target calculation: 500 – ( 630 – 500 ) = 370

October 12, 2011

Dollar retreats, gold rises

The US Dollar Index is retracing to test support at 76.00. Respect of support would confirm the primary up-trend and offer a target of 84.00* for the next advance. A 63-day Twiggs Momentum trough above zero would strengthen the signal.

US Dollar Index

* Target calculation: 80 + ( 80 – 76 ) = 84

Spot gold is testing the declining trendline and resistance at $1700/ounce. Respect would warn of a decline to test $1500*. The primary trend remains upward and will resume if the Fed introduces further quantitative easing in the months ahead.

Spot Gold

* Target calculation: 1700 – ( 1900 – 1700 ) = 1500

October 10, 2011

Dollar fall lifts gold

The US Dollar Index broke out of its trend channel, warning of a correction back to 76 on the daily chart. Respect of 76 — or 63-day Twiggs Momentum respect of the zero line — would confirm the primary up-trend and offer a target of 84*.

Dollar Index

* Target calculation: 80 + ( 80 – 76 ) = 84

Spot gold rallied as the dollar weakened and is testing its descending trendline and resistance at $1700/ounce. Respect would signal a decline to $1500*, while upward breakout would indicate that the correction has weakened but not necessarily ended.

Spot Gold

* Target calculation: 1700 – ( 1900 – 1700 ) = 1500

October 6, 2011

Crude breaks support

Apologies. I messed up the links at the bottom of the Trading Diary newsletter. For the correct link click here. Correct links are also available on the Trading Diary web page and under Recent Posts in the right margin of this page.

Brent crude broke support at $104/barrel and is testing the lower trend channel and long-term rising trendline. Respect would signal a rally to the upper channel border, while breakout below the rising trendline would warn of a sharp fall. 63-Day Momentum below zero suggests the down-trend is strengthening.

Brent Crude Afternoon Markers

* Target calculation: 105 – ( 115 – 105 ) = 95

October 5, 2011

Commodities down-trend accelerates

CRB Commodities index broke out below its trend channel and is now retracing to test the new resistance level. Respect of resistance at 300 would confirm the breakout and warn of an accelerating down-trend. The 63-day Momentum peak below zero indicates a strong primary down-trend.

CRB Commodities Index

October 5, 2011

Spot gold correction tests $1600

Spot gold is testing support at $1600/ounce, but the primary trend remains upward. Expect a rally to the declining trendline. Breakout above $1700 would indicate the correction is weakening, while failure of support would test $1500*.

Spot Gold

* Target calculation: 1700 – ( 1900 – 1700 ) = 1500

Amex Gold Bugs Index, representing un-hedged gold stocks, is testing primary support at 500. Failure of support would warn of a reversal in the primary trend and would be a bearish sign for spot metal prices.

Amex Gold Bugs Index

September 28, 2011

Gold and crude suffer from strong dollar

Spot Gold is testing support at its initial target of $1600/ounce. The long tail is evidence of buying support, but failure would test $1500. The primary trend direction remains up and, despite gold experiencing a strong correction, is unlikely to change.

Spot Gold

* Target calculation: 1750 – ( 1900 – 1750 ) = 1600

Brent crude is testing support at $104/barrel while Nymex WTI crude is at $80/barrel. There is no sign of the divergence between the two grades closing. Both have signaled a primary down-trend, though Brent has yet to confirm with a break of its rising trendline.

Crude Oil

* Target calculation: 105 – ( 120 – 105 ) = 90