Gold & Commodities Archives - Page 71 of 76

October 20, 2011

Commodities long-term trend

Brent crude is edging lower in a wide trend channel. Respect of the long-term ascending trendline (on the weekly chart) would suggest upward breakout from the channel — and a target of $150/barrel*. Recovery of 63-day Twiggs Momentum above zero would strengthen the signal.

Crude Oil

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

The CRB Commodities index is similarly testing its long-term rising trendline at 300. Penetration of the secondary descending trendline would indicate another primary advance on the monthly chart. The 63-day Twiggs Momentum peak below zero [R], however, warns of a primary down-trend. Failure of support at 290 would strengthen the signal.

CRB Commodities Index

* Target calculation: 370 +( 370 – 290 ) = 450

October 19, 2011

Gold heads for $1600

Spot gold is headed for a test of support at $1600/ounce; failure would offer a target of $1500*. In the long term, the primary trend remains up and breakout above $1700 would signal an advance to $1900.

Spot Gold

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

Amex Gold Bugs index ($HUI) is headed for a test of primary support at 500 on the weekly chart. Failure would signal a primary down-trend with an initial target of 400* — and warn of a similar reversal for spot gold. Declining 63-day Twiggs Momentum slipped below zero to strengthen the bear signal.

Amex Gold Bugs Index

* Target calculation: 500 – ( 600 – 500 ) = 400

October 19, 2011

CFTC Limits Commodity Speculation

The Commodity Futures Trading Commission (CFTC) voted 3 to 2 today to limit trading in oil, wheat, gold and other commodities after a boom in raw-materials speculation, record- high prices and years of debate and delay.

The rule limits the number of contracts a single firm can hold and it limits traders to 25 percent of deliverable supply in the month nearest to delivery.

via CFTC Limits Commodity Speculation.

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