Tag: Gold

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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

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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

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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

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Gold falls hard — not my best call

Spot gold broke support at $1700/ounce, falling hard to $1650. The calculated target is $1600* or $1500 depending on whether you take the base of the double top as $1750 or $1700.

Spot Gold

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

When you look at the trend channel on the weekly chart, however, it is likely that the sharp correction will overshoot the trend channel on the lower side. Possibly as low as $1300*.

Spot Gold Weekly

* Target calculation: 1500 – ( 1900 – 1700 ) = 1300

I have to eat my words from September 11: “With Europe awash with stories of the imminent default of Greece, and German banks told to prepare for a 50% haircut on Greek bonds, this would be a good time to buy gold.” Sure I qualified by warning that below $1800 all bets were off, but should have placed more emphasis on the overbought situation on the weekly chart and less on the approaching European tsunami.

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Gold tests key support level at $1750/ounce

Buyers appear to be losing interest and spot gold is headed for a test of the key $1750 support level. Failure would complete a double top, warning of a correction to $1500/$1600* (depending on whether you take the base as $1700 or $1750). Respect would indicate another test of $1900.

Spot Gold

* Target calculation: 1900 + (1900 – 1750 ) = 2050 and 1750 – (1900 – 1750 ) = 1600

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Gold finds safe haven support

Softening of gold prices from the “stronger” dollar is being offset by demand for gold as a safe haven from the looming euro-zone crisis. Respect of support at 1750 would indicate another test of $1900; confirmed if spot recovers above $1830.  The pattern remains bullish at present, but breakout below $1750 would warn of a double top and correction to $1500/$1600* (depending on whether you take the base as $1700 or $1750).

Spot Gold

* Target calculation: 1900 + (1900 – 1750 ) = 2050 and 1750 – (1900 – 1750 ) = 1600

Gold miners such as AMEX Gold Bugs Index ($HUI) continue to test support after their recent breakout. Failure of support at 600 would warn of a bull trap and weaker spot prices.

Amex Gold Bugs Index

* Target calculation: 600 + ( 600 – 500 ) = 700

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The Next Selling Wave Is About to Begin | Toby Connor | Safehaven.com

As the stock market moves down into the next daily cycle low and the selling pressure intensifies, this should drive the dollar index much higher. It remains to be seen if gold can reverse this pattern of weakness in the face of dollar strength, especially since the dollar will almost certainly be rallying violently during the intense selling pressure that is coming in the stock market.

via The Next Selling Wave Is About to Begin | Toby Connor | Safehaven.com.

 

When the dollar strengthens, gold normally falls. Except in times of high uncertainty (like the present), when demand for gold as a safe haven overcomes downward pressure from a stronger dollar. Buying gold at current prices is a bet that either Greece will default — a pretty safe bet — or that the Fed is again forced to use its printing press (not quite as certain).

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Gold finds support

Spot gold penetrated short-term support at $1800/ounce and is testing the medium-term level at $1750. Compare the two declines in the current triangle/consolidation, however, and buying pressure (accumulation) is evident. It took two days for price to fall to $1750 during August, with two strong red candles one below the other. On the second downward leg, candle bodies often overlap and it has taken more than two weeks to reach the same target. Recovery above $1830 would signal another test of $1900 and confirm the bullish ascending triangle. Failure of support at $1750, however, would complete a double top, warning of a correction to $1600*.

Spot Gold

* Target calculation: 1900 + ( 1900 – 1700 ) = 2100 and 1750 – ( 1900 – 1750 ) = 1600

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