Tag: Gold Bugs Index

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Gold Bugs and Silver warn of further weakness

Low interest rates strengthen demand for gold as they reduce the carrying cost. A rising dollar, however, would reduce demand.

Gold encountered stubborn resistance at $1250/ounce. Respect would confirm the primary down-trend. Another 13-week Twiggs Momentum peak below zero would strengthen the signal. Breach of primary support at $1180 would offer a long-term target of $1000*. Recovery above $1250 is unlikely, but would test the descending trendline around $1300.

Spot Gold

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

Gold Bugs Index, representing un-hedged gold stocks, broke long-term support at 190, signaling another primary decline. Gold is likely to follow.

Gold Bugs Index

Silver failed to rally in concert with gold, instead consolidating in a narrow range which suggests further weakness. Another bearish sign for gold.

Silver

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Bears eye gold

Gold is testing resistance at $1250/ounce after a two-week retracement. 13-Week Twiggs Momentum (below zero) continues to indicate a primary down-trend. Respect of resistance at $1250 would confirm this. And breach of primary support at $1180 would offer a long-term target of $1000*.

Spot Gold

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

Silver has already broken long-term support, signaling another primary decline. Gold is likely to follow.

Gold Bugs Index, representing un-hedged gold stocks, is also testing long-term support (at 190). Breach of support would strengthen the bear signal for gold.

Gold Bugs Index

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Gold threatens four-year low

Gold & Silver

Silver broke long-term support at $18.50 per ounce, offering a target of $15.50/ounce*. First, expect retracement to respect the new resistance level. Gold is likely to follow Silver to a new four-year low.

Spot Silver

* Target calculation: 18.5 – ( 21.5 – 18.5 ) = 15.5

Gold respected the new resistance level at $1240/ounce and is now testing $1200. Follow-through below $1180 would offer a long-term target of $1000*, while respect would suggest another rally to $1240. Declining 13-week Twiggs Momentum, below zero, further strengthens the bear signal.

Spot Gold

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

Gold Bugs Index (representing un-hedged gold stocks) is also testing long-term support. Breach of support at 200 would strengthen the bear signal for Gold.

Gold Bugs Index

Interest Rates and the Dollar

Rising Treasury yields and a stronger Dollar both add downward pressure to Gold. Higher interest rates increase the carrying cost of gold, while the Dollar competes with Gold both as a safe haven and as an appreciating asset (against other currencies).

The Dollar Index broke through resistance at the 2013 high of 84.75. Rising 13-week Twiggs Momentum, above zero, signals a primary up-trend. Expect retracement to test the new support level. Respect is likely and would offer a long-term target of 89*. Reversal below 84.50 is unlikely, but would warn of a correction.

Dollar Index

* Target calculation: 84 + ( 84 – 79 ) = 89.00

The yield on ten-year Treasury Notes respected resistance at 2.65 percent and is retracing to test support at 2.50. Follow-through above 2.70 would signal an advance to 3.00, but 13-week Twiggs Momentum below zero continues to suggest a primary down-trend. Failure of support at 2.50 would indicate another test of primary support at 2.30.

10-Year Treasury Yields

* Target calculation: 2.30 – ( 2.60 – 2.30 ) = 2.00

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Gold threatens down-trend

Gold continues its decline since breaking medium-term support at $1280. Declining 13-week Twiggs Momentum below zero suggests a primary down-trend. Breach of primary support at $1240/ounce would confirm. Follow-through below $1180/$1200 would strengthen the bear signal. Respect of support at $1240 is unlikely, but recovery above $1280 would suggest that another bottom is forming.

Spot Gold

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

Gold Bugs Index, representing un-hedged gold stocks, breach of support at 235 strengthens the bear signal for gold. Reversal of 13-week Twiggs Momentum below zero is also bearish.

Gold Bugs Index

The Dollar Index is testing resistance at 84.50/84.80. Recovery of 13-week Twiggs Momentum above zero reflects a primary up-trend. Expect retracement or consolidation at the resistance level, but breakout would signal another primary advance. Reversal below 81.50 remains unlikely. A rising dollar is likely to weaken demand for gold.

Dollar Index

* Target calculation: 81.50 – ( 81.50 – 79.00 ) = 84.00

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Gold Declines as the Dollar rises

A rising dollar, falling crude prices and low inflation all favor a down-trend for gold, while falling long-term interest rates are the only alleviating factor at present.

Gold broke support at $1280, indicating another test of primary support at $1200/ounce. Declining 13-week Twiggs Momentum below zero suggests a primary down-trend. Failure of medium-term support at $1240 would strengthen the bear signal. Breach of primary support would confirm.

Spot Gold

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

Gold Bugs Index, representing un-hedged gold stocks, has not yet followed. Breach of support at 235 would confirm another test of primary support at 205. Reversal of 13-week Twiggs Momentum below zero would strengthen the signal.

Gold Bugs Index

Silver, on the other hand is already testing primary support at $18.50/$19.00 per ounce. Breach of support would strengthen the bear signal for gold, while respect would suggest further consolidation.

Spot Silver

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Gold signals up-trend

Spot gold encountered resistance at $1350/ounce. Retracement that respects $1300 and the rising trendline would suggest an advance to $1400. Crossover of 13-week Twiggs Momentum above zero indicates a primary up-trend, especially following a bullish divergence on the weekly chart. Breakout above $1400 would confirm the signal, but still seems a long way off.

Spot Gold

The Gold Bugs Index is similarly testing resistance at 250. Breakout would signal an advance to 280. Again, bullish divergence on 13-week Twiggs Momentum and crossover above zero indicate a primary up-trend. Reversal below 210 is unlikely, but would warn of continuation of the down-trend.

Gold Bugs Index

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Gold follows through

The Gold Bugs Index followed through above 225 after breaking its descending trendline, suggesting that a bottom is forming. Bullish divergence on 13-week Twiggs Momentum strengthens the signal. Reversal below 210 is unlikely, but would re-test primary support at 190.

Gold Bugs Index

Spot gold similarly followed-through above 1280, suggesting a bottom. Again, bullish divergence on 13-week Twiggs Momentum strengthens the signal. Another retracement to find support is likely before there is a serious attempt at the September 2013 high of 1430, which would complete a large double bottom. Reversal below 1240 is unlikely, but would warn of another test of primary support at 1180.

Spot Gold

Silver is likely to follow gold. Breakout above $20.50 would suggest another test of $25.00/ounce.

Spot Silver

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Gold and silver bottom?

The Gold Bugs Index broke its descending trendline on the weekly chart and shows a bullish divergence on 13-week Twiggs Momentum. Both suggest reversal to a primary up-trend, but first we are likely to see a re-test of support at 190. Respect of 190 followed by recovery above the recent high at 225 would strengthen the reversal signal.

Gold Bugs Index

Spot gold displays a similar penetration of the descending trendline and bullish divergence on 13-week Twiggs Momentum, suggesting that a bottom is forming. Follow-through above 1280 would strengthen the signal. Reversal below 1240, however, would warn of another test of primary support at 1180. Breach of 1180 is unlikely, but would offer a target of 1000*.

Spot Gold

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

The silver chart, consolidating above primary support at $18/ounce, is mimicking gold. Recovery above $20.50 would also suggest that a bottom is forming.

Spot Silver

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Gold: Bullish divergence

The Gold Bugs Index, representing un-hedged gold stocks, is often a leading indicator of spot prices. Bullish divergence on 13-week Twiggs Momentum and breach of the descending trendline suggest that a bottom is forming. Only recovery above 280 would signal a primary reversal at present, but another retracement that respects support at 190 would change that.

Gold Bugs Index

Spot gold broke resistance at $1250/ounce and we should expect retracement to test the new support level. Bullish divergence on 13-week Twiggs Momentum and breach of the descending trendline suggest that a bottom is forming. We may face an extended consolidation if falling interest rates boost gold while a stronger dollar exerts downward pressure. Failure of $1200 is now unlikely, but would warn of a decline to 1000*.

Spot Gold

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

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Gold Bugs bullish

The Gold Bugs Index, representing un-hedged gold stocks, is often a leading indicator of spot prices. Bullish divergence on 13-week Twiggs Momentum suggests that a bottom is forming and is strengthened by breach of the descending trendline. Only recovery above 280 would signal reversal to a primary up-trend, but retracement that respects support at 190 would be a bullish indication.

Gold Bugs Index

Dollar Index

Rising interest rates and a stronger dollar, however, are likely to exert downward pressure on gold.

The yield on ten-year Treasury Notes respected resistance at 3.00 percent. Breach of support at 2.75 and the rising trendline would test primary support at 2.50, but failure of this level is unlikely. Breakout above 3.00 is more likely and would offer a target of 3.50 percent*.

10-Year Treasury Yields

* Target calculation: 3.00 + ( 3.00 – 2.50 ) = 3.50

The Dollar Index is again testing resistance at 81.50 after a bullish higher trough and breach of the descending trendline. Breakout would signal a primary advance to 83.00*, while recovery of 13-week Twiggs Momentum above zero would strengthen the signal. Respect of resistance is less likely, but reversal below 80 would warn of further weakness.

Dollar Index

* Target calculation: 81.5 + ( 81.5 – 80 ) = 83

Spot Gold

Spot gold respected long-term support at $1200/ounce and is testing resistance at $1260/ounce as well as the descending trendline. Respect would signal another test of $1200, while breakout above $1260 would suggest that a bottom is forming. Recovery of 13-week Twiggs Momentum above zero would strengthen the signal. Failure of $1200, however, would warn of a decline to 1000*.

Spot Gold

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

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