Spot gold retreated to test medium-term support at $1180/ounce. Breach of support would indicate a test of the primary level at $1140. 13-Week Twiggs Momentum peaks below zero suggest a primary down-trend. Failure of $1140 would offer a target of $1000*.
* Target calculation: 1200 – ( 1400 – 1200 ) = 1000
CPI continues below zero, but core CPI (excluding food and energy) came in at 1.81% for April 2015, indicating long-term inflationary pressures are constant.
Low inflation relieves upward pressure on bond yields. The yield on 10-year Treasury notes encountered resistance at 2.25%, with tall shadows on the last 3 weekly candles. Expect another retracement to test support at 1.85%. Reversal of 13-week Twiggs Momentum below zero would strengthen the signal.
* Target calculation: 2.25 + ( 2.25 – 1.85 ) = 2.65
The Dollar Index broke resistance at 96 despite falling bond yields, indicating the correction is over and another test of 100 likely. 13-Week Twiggs Momentum is declining, but recovery above the descending trendline would support the (bull) signal. Reversal below 96 is unlikely, but would test support at 93.
The inflation-adjusted price of gold (gold/CPI) suggests that gold has further to fall. Unusually high levels of intervention by central banks in financial markets may, however, be fueling support at current prices — suggesting a gradual decline rather than a sharp adjustment.
Spot gold is headed for another test of medium-term support at $1180/ounce after respecting resistance at $1220. Breach of support would test the primary level at $1140. 13-Week Twiggs Momentum peaks below zero suggest a primary down-trend. Failure of $1140 would test the long-term target of $1000*.
* Target calculation: 1200 – ( 1400 – 1200 ) = 1000
Ichimoku is roughly translated as ‘one glance’ and is intended as a complete trading system. Developed by Japanese journalist Goichi Hosoda in the 1960s, the aim of Ichimoku is to present the entire picture of long- and short-term price action in a single chart. ‘Cloud’ refers to the appearance of the Senkou A and B indicators (plotted 26 periods ahead of the current period) which indicate overall bullishness or bearishness of the market. Price action above the cloud is bullish, below the cloud is bearish, while within the cloud is uncertain. A green cloud further strengthens a bull signal, or weakens a bear signal, while a red cloud does the opposite.
The weekly chart shows a strong bear trend, with price action below a predominantly red cloud. The latest candle, however, penetrated the lower border of the cloud, indicating a period of uncertainty. Given the overall bearish posture of the chart, price action is likely to resolve to the downside and reversal below the cloud would generate a short signal, especially if confirmed by the fast MA (blue Tenkan) below the slow MA (red Kijun). Recovery above the upper border of the cloud is unlikely, but would signal reversal to an up-trend.
You can find further details on Ichimoku Cloud at Incredible Charts: Ichimoku Cloud and Daily FX: A Walk Through Ichimoku.
The (5-year) inflation breakeven (Treasury yield – TIPS) recovered from the oil price fall to post 1.66% on May 8.
Growth in average hourly earnings (manufacturing – production and non-supervisory employees) also recovered to 1.49% at the end of April.
The stronger inflation outlook lifted the yield on 10-year Treasury notes above resistance at 2.25%. Recovery of 13-week Twiggs Momentum above zero also signals an up-trend. Target for the breakout is 2.65%*. This is a bearish sign for bonds, but only breakout above long-term resistance at 3.00% would signal that the secular bull market is over.
* Target calculation: 2.25 + ( 2.25 – 1.85 ) = 2.65
The Dollar Index found support at 94 in response to rising yields. 13-Week Twiggs Momentum is declining, but recovery above 96 would suggest that the correction is over and another test of 100 likely. Otherwise, expect strong support at the primary trendline around 92.
Gold is testing medium-term support at $1180/ounce. Breach would test the primary level at $1140. 13-Week Twiggs Momentum holding below zero suggests continuation of the primary down-trend. Failure of $1140 would test the long-term target of $1000*.
* Target calculation: 1200 – ( 1400 – 1200 ) = 1000
Barrick Gold failed to break resistance at 13.50 and looks set to continue ranging between 10.00 and 13.50. The consolidation is not an indication of reversal in the primary down-trend.
Inflation-adjusted price of gold (USD price divided by US consumer price index) is well above its historic long-term average, indicating that the bear trend is likely to continue.
On the daily chart spot gold recovered from its March test of primary support at $1140, but has encountered strong resistance around $1200/ounce. 13-Week Twiggs Momentum continues to oscillate below zero, suggesting continuation of the primary down-trend. Reversal below $1180 would warn of another test of $1140, while breach of the primary support level would signal a decline to $1000/ounce*. Breakout above $1220 is unlikely, but would signal a (bear) rally to $1300/ounce.
* Target calculation: 1200 – ( 1400 – 1200 ) = 1000
Stewart Thomson on SafeHaven suggests that Barrick Gold is about to break its 4-year down-trend and that spot gold is likely to follow.
Barrick Gold (ABX) has been ranging between 10.00 and 13.50 for the last 6 months. The long-term descending trendline is penetrated, but movement is more sideways than upward. 13-Week Twiggs Money Flow recovery to above zero is a recurring pattern suggesting a secondary, bear rally rather than a primary reversal; only a significant trough above zero would indicate otherwise. Breakout above 13.50 would indicate a rally, but is likely to encounter resistance between 16.00 and 21.00. A correction that respects the new support level (at 13.50) is unlikely, but would signal a primary reversal.
Gold has similarly consolidated between $1140 and $1300, shown here on a monthly chart. Recovery above $1200/ounce suggests a test of $1300, but 13-week Twiggs Momentum remains negative and we are unlikely to see a reversal with current low inflation. Breach of primary support at $1140 remains a stronger possibility and would signal a decline to $1000/ounce*.
* Target calculation: 1200 – ( 1400 – 1200 ) = 1000
Gold retreated below support at $1200/ounce. Follow-through below $1180 would indicate another test of primary support at $1140/$1150. Breakout above $1220/ounce is now unlikely. A 13-week Twiggs Momentum peak below zero warns of a primary down-trend. Breach of primary support would signal a decline to $1000/ounce.
* Target calculation: 1200 – ( 1400 – 1200 ) = 1000
Long-term Treasury yields remain in a bear trend, with 10-year yields holding below resistance at 2.00%. Breach of support at 1.85% would signal another test of the primary level at 1.65%. A lower inflation outlook is translating into lower interest rate expectations.
The Dollar Index is likewise encountering resistance at 100. Breakout would signal an advance to 104*. Reversal below 96, however, would test primary support at 94.
* Target calculation: 100 + ( 100 – 96 ) = 104
Gold is also consolidating, ranging between $1180 and $1220/ounce. Reversal below $1180 would signal a decline to $1000/ounce*, while breakout above $1220 would indicate a rally to $1300/ounce.
* Target calculation: 1200 – ( 1400 – 1200 ) = 1000
Apologies for my recent absence. I seem to take longer to recover from a ‘flu virus than I used to. The Dollar Index, however, has made a robust recovery, breaking resistance at 98.50. Completion of a double-bottom suggests a new advance with a target of 104*.
* Target calculation: 100 + ( 100 – 96 ) = 104
Gold retreated below its former primary support level of $1200/ounce as the dollar strengthened. Breach of the rising trendline suggests the bear rally is over; follow-through below $1180 would confirm, strengthening the long-term target of $1000/ounce*.
* Target calculation: 1200 – ( 1400 – 1200 ) = 1000
Ten-year Treasury Note yields are testing support at 1.85% after consolidating below 2.00% for 2 weeks. 13-Week Twiggs Momentum below zero continues to indicate a primary down-trend. Failure of support at 1.85% would test primary support at 1.65%.
Correction on the Dollar Index has lasted 3 weeks but continues to respect the first line of support at 95.50. Rising 13-week Twiggs Momentum also continues to indicate a strong (primary) up-trend. Recovery above 100 is likely and would offer a target of 110*.
* Target calculation: 100 + ( 100 – 90 ) = 110
Gold is testing resistance at $1200/ounce on the back of softer interest rates and a weak dollar. Breakout above $1220/ounce would indicate a rally to $1300. But 13-week Twiggs Momentum below zero continues to indicate a primary down-trend. Respect of $1300, or reversal below $1180 would suggest another test of primary support at $1140/$1150.
* Target calculation: 1200 – ( 1400 – 1200 ) = 1000
