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Spot Gold respected resistance at $1180/ounce and is headed for another test of support at $1080. Declining 13-week Twiggs Momentum with peaks below zero confirms a strong primary down-trend. Breach of support at $1080 would offer a target of $1000/ounce*.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

Barrick Gold, one of the largest global gold producers, has already broken support at $6.50, signaling another decline (with a target of $4.50).

Barrick Gold

The Gold-Oil ratio remains in overbought territory above 20, suggesting continuation of the bear market for gold.

Gold-Oil ratio

Long-term crude prices have resumed their fall, with June 2017 (CLM2017) futures headed for another test of support at $48/barrel after a bear rally respected the descending trendline. If long-term crude prices break support at $48, gold is not likely to hold above $1000/ounce.

WTI Light Crude June 2017 Futures

A long-term chart of silver shows strong support at $15/ounce. Recovery above $18 and 13-week Twiggs Momentum above zero would suggest that the precious metal has bottomed. A bullish sign for gold.

Silver

The picture for gold is less clear, with further tests of primary support at $1140/ounce expected. 13-Week Twiggs Momentum is also rising and recovery above zero would be a bullish sign. But breakout above $1300 is unlikely at present. Breach of support at $1140 would offer a target of $1000*.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

Stocks of major gold producers like Barrick Gold remain bearish.

Barrick Gold

The Dollar Index respected its declining trendline, warning of another test of primary support at 93. Breach of support would signal a primary down-trend. A weaker Dollar would boost demand for gold and lift the US economy, enhancing the competitiveness of exporters and local manufacturers facing competition in domestic markets.

Dollar Index

Long-term interest rates are rising, however, and provide support for the Dollar. 10-Year Treasury yields respected their new support level at 2.25% and are likely to test long-term resistance at 3.0 percent. Rising 13-week Twiggs Momentum above zero, strengthens the signal.

10-Year Treasury Yields

Tag: ABX

Gold: The next leg down

Gold, silver and the Dollar