Spot Gold Archives - Page 35 of 42 - the patient investor %

January 24, 2013

Gold and commodities find support

A look at the long-term (monthly) chart shows gold undergoing a correction before encountering support at $1650/ounce. Recovery above $1700 would re-test resistance at $1800, the higher trough suggesting resumption of the primary up-trend. Breakout above $1800 would confirm. A 63-day Twiggs Momentum trough close to the zero line would strengthen the signal, while reversal below zero would suggest that the 5-year bull-trend is over and a test of primary support at $1500 likely.

Spot Gold

Commodity Prices are a good predictor of stock market performance. Dow Jones-UBS Commodity Index retreated from 150 but support around 140 would indicate another attempt at a breakout — and recovery above 144 would strengthen the signal. Rising Twiggs Momentum suggests a primary up-trend but only breakout above 152 would confirm.

US Dollar Index

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.

January 17, 2013

Gold and the dollar

Gold is undergoing a correction on the weekly chart. Declining momentum and breach of the long-term rising trendline suggest that the 5-year bull-trend is ending, but recovery above $1700 per ounce would indicate one more attempt at $1800 resistance. Respect of $1700, however, would indicate a test of primary support at the May 2012 low at $1525.

Spot Gold

The Dollar Index respected resistance at 81 and is likely to re-test primary support at 78.50. Twiggs Momentum oscillating below zero already indicates a primary down-trend — confirmed if primary support is broken. Recovery above 81.50 remains unlikely, but would indicate an advance to 84.

US Dollar Index

* Target calculation: 78.5 – ( 81.5 – 78.5 ) = 75.5

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

December 5, 2012

Gold breaks $1700

Gold broke support at $1700 per ounce, indicating a test of primary support at $1675. Breakout would offer an initial target of $1600*, with a long-term target of the May 2012 low at $1525. Declining 63-day Twiggs Momentum indicates weakness but values above zero still reflect a primary up-trend and the weakening dollar suggests strong support.

Spot Gold

* Target calculation: 1675 – ( 1750 – 1675 ) = 1600

The Dollar Index broke medium-term support at 80 on the weekly chart while the dollar is approaching its September low against the euro. The 63-day Twiggs Momentum peak below zero indicates a primary down-trend — confirmed if primary support at 78.50 is broken. Recovery above 81.50 is most unlikely but would indicate an advance to 84.

US Dollar Index

* Target calculation: 78.5 – ( 81.5 – 78.5 ) = 75.5

The daily chart shows retracement to confirm resistance at 80.

US Dollar Index

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 29, 2012

Gold long tail as dollar retreats

Yesterday’s long tail on the spot gold daily chart indicates support at $1700 per ounce. Recovery above $1750 would signal another test of $1800. 63-Day Twiggs Momentum well above zero continues to indicate a healthy up-trend. A weakening dollar would strengthen the signal.

Spot Gold

* Target calculation: 1800 + ( 1800 – 1700 ) = 1900

The Dollar Index (weekly chart) is testing medium-term support at 80. Failure would threaten a head-and-shoulders reversal. Breach of primary support at 78.50 would offer a target of 74*. 63-Day Twiggs Momentum holding below zero already suggests a primary down-trend. Recovery above 81.50 is unlikely but would indicate an advance to 84.

US Dollar Index

* Target calculation: 79 – ( 84 – 79 ) = 74

The DJ-UBS Commodity Index (weekly chart) respected support at 140, helped by the weaker dollar. 63-Day Twiggs Momentum above zero suggests a primary up-trend but reversal would re-test primary support at 126.

DJ-UBS Commodity Index

Nymex WTI Light Crude and ICE Brent Crude both trend downwards but the gap between the two is widening. Middle East tensions affect Brent Crude supply more than its West Texas cousin. 63-Day Twiggs Momentum holding below zero warns of a primary down-trend. Breach of primary support would confirm: WTI at $78 per barrel and Brent Crude at $90.

Nymex WTI Light Crude

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 22, 2012

Gold strengthens as dollar retreats

Long tails on the last two days of the spot gold daily chart indicate strong support at $1700 per ounce. Breakout above $1740 would indicate another test of $1800. 63-Day Twiggs Momentum well above zero suggests a healthy up-trend. A weakening dollar would strengthen the signal.

Spot Gold

* Target calculation: 1800 + ( 1800 – 1700 ) = 1900

The Dollar Index (weekly chart) retreated below resistance at 81. Follow-through below 80 would test primary support at 78.50, while failure of primary support would complete a head-and-shoulders reversal with a target of 74*. 63-Day Twiggs Momentum holding below zero already suggests a primary down-trend. Breakout above 81.50 is unlikely but would indicate an advance to 84.

US Dollar Index

* Target calculation: 79 – ( 84 – 79 ) = 74

The DJ-UBS Commodity Index (weekly chart) respected support at 140. The 63-day Twiggs Momentum trough above zero suggests a primary up-trend. A weakening dollar would strengthen the signal, while breakout above 152 would confirm. Breach of 140 is unlikely but would test primary support at 126.

DJ-UBS Commodity Index

Nymex WTI Light Crude and ICE Brent Crude are both trending downward. The 63-day Twiggs Momentum peak at zero warns of a primary down-trend. Breach of primary support would confirm: WTI at $78 per barrel and Brent Crude at $90.

Nymex WTI Light Crude

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 16, 2012

The Gold-Euro-Dollar conundrum Part II

Last week we discussed conflicting signals from the euro and US dollar. The Dollar Index and the euro are normally plotted inversely to each other. I have reversed this on the chart below. As expected, with the euro the largest component (57.6 percent) of the dollar index weighted basket of currencies, there is a strong correlation. Divergences between the two seldom last as traders “arbitrage” the differences.

The rising Dollar Index is testing resistance at 81.50. Respect of resistance would threaten a head-and-shoulders reversal — with a target of 74* — following a breakout below primary support at 78.50. Falling 63-day Twiggs Momentum, below zero, already suggests a primary down-trend. But recovery above 81.50/82.00 would negate this, indicating another primary advance.

US Dollar Index

* Target calculation: 79 – ( 84 – 79 ) = 74

Spot gold (daily chart) is testing short-term support at $1700 per ounce. Respect of support would reinforce the earlier trendline break, suggesting another test of $1800. But a stronger dollar and failure of support at $1675 would indicate a more severe correction.

Spot Gold

* Target calculation: 1800 + ( 1800 – 1700 ) = 1900

The DJ-UBS Commodity Index (weekly chart) continues to test support at 140. A 63-day Twiggs Momentum trough above zero would indicate a primary up-trend. Recovery above 152 would confirm. A stronger dollar and breach of 140, however, would test primary support at 126.

DJ-UBS Commodity Index

Nymex WTI Light Crude and ICE Brent Crude are both headed for a test of primary support: WTI at $76/$78 per barrel and Brent Crude at $90. The 63-day Twiggs Momentum peak below zero warns of a primary down-trend.

Nymex WTI Light Crude

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 8, 2012

The Gold-Euro-Dollar conundrum

The Euro broke support at $1.28 against the greenback (weekly chart). Respect of the descending trendline warns of a down-swing to test primary support at $1.20. Reversal of 63-day Twiggs Momentum below zero would strengthen the signal. But the Dollar Index and Gold suggest the opposite. Recovery above $1.28 would indicate a bear trap.
Euro

The Dollar Index is inversely rising to test resistance at 81/81.50. Breakout would indicate another test of 84.00 but 63-Day Twiggs Momentum below zero warns of a primary down-trend. Rising gold also suggests dollar weakness. Reversal below support at 78.50 would complete a head-and-shoulders reversal with a target of 74*.

US Dollar Index

* Target calculation: 79 – ( 84 – 79 ) = 74

Spot gold (daily chart) broke resistance at $1725 per ounce, signaling an advance to $1900*. The 63-day Twiggs Momentum trough above zero indicates a primary up-trend. Breakout above $1800 would confirm. The conundrum is the euro is weakening and dollar index strengthening but gold is rising rather than weakening as expected.

Spot Gold

* Target calculation: 1800 + ( 1800 – 1700 ) = 1900

The DJ-UBS Commodity Index (weekly chart) found support at 140. 63-Day Twiggs Momentum is testing zero. Respect would indicate a primary up-trend. Recovery above $1.52 would confirm. Breach of $140, however, and 63-day Twiggs Momentum below zero, resulting from a strengthening dollar and/or global down-turn, would test primary support at 126.

DJ-UBS Commodity Index

Nymex WTI Light Crude is headed for a test of primary support at $76/$78 per barrel. Declining 63-day Twiggs Momentum, below zero, warns of a primary down-trend. Brent Crude is also weakening, headed for test of primary support at $90.

Nymex WTI Light Crude

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 6, 2012

Gold correction slows

Spot gold recovered above support at $1700 per ounce. Frequent penetrations of the declining trendline indicate the correction is slowing. Note how the metal tends to move in increments of $25. Breakout above $1725 would indicate an advance to $1900*. Breach of resistance at $1800 would confirm. A 63-day Twiggs Momentum trough above zero is likely — and would signal a primary up-trend, while reversal below zero is unlikely and would warn of a down-trend.

Spot Gold

* Target calculation: 1800 + ( 1800 – 1700 ) = 1900

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

October 31, 2012

Gold and dollar test support

The Dollar Index (daily chart) broke medium-term resistance at 80 before retracing to test the new support level. Penetration of the descending trendline indicates the correction has ended. A long tail on Wednesday indicates (short-term) buying pressure; respect of support would signal an advance to 81. But the primary trend is downward — reflected 63-day Twiggs Momentum oscillating below zero — and breach of support at 79 would signal a decline to 75*.

US Dollar Index

* Target calculation: 78 – ( 81 – 78 ) = 75

Still on the daily chart, spot gold found short-term support at 1700, penetrating the descending trendline. A stronger dollar would suggest further gold weakness but the $DXY primary trend remains down. Expect another test of $1700 but respect would signal a rally to $1800 per ounce*. A 63-day Twiggs Momentum trough above zero would signal a primary up-trend, while breakout above $1800 would confirm.

Spot Gold

* Target calculation: 1650 + ( 1650 – 1500 ) = 1800

The DJ-UBS Commodity Index (weekly chart) reflects an easing inflation outlook, breach of medium-term support at 145 signaling a correction. A 63-day Twiggs Momentum trough above zero would suggest a primary up-trend, while a fall below zero would mean further weakness.

DJ-UBS Commodity Index

Brent Crude (weekly chart) is testing support at $108 per barrel. Breakout would indicate a decline to $100. Reversal of 63-day Twiggs Momentum below zero would strengthen the bear signal.

ICE Brent Crude Afternoon Markers

* Target calculation: 108 – ( 117 – 108 ) = 99

Nymex WTI Light Crude is falling faster, headed for a test of primary support at $76/$78 per barrel. A 63-day Twiggs Momentum peak below zero warns of a primary down-trend.

Nymex WTI Light Crude

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

October 24, 2012

Gold and commodities fall

The Dollar Index is consolidating between 79 and 80. Upward breakout would test resistance at 81.00/81.50 — penetration of the descending trendline indicating the correction has ended — but the primary trend is downward and breach of support at 79 would signal another decline. A 63-day Twiggs Momentum peak below zero would strengthen the bear signal.

US Dollar Index

* Target calculation: 79 – ( 81 – 79 ) = 77

Inflation expectations are easing, with spot gold undergoing a correction since breaking support at 1750. Expect short-term support at 1700 and penetration of the descending trendline would indicate another test of $1800 per ounce*. A 63-day Twiggs Momentum trough above zero is likely — and would signal a primary up-trend, while breakout above $1800 would confirm.

Spot Gold

* Target calculation: 1650 + ( 1650 – 1500 ) = 1800

The DJ-UBS Commodity Index also reflects an easing inflation outlook, breaking medium-term support at 145 to signal a correction. 63-Day Twiggs Momentum is unlikely to remain above zero but a shallow trough would be a bullish sign.

DJ-UBS Commodity Index

Brent Crude is also falling, having broken support at $108 per barrel. Expect a test of $100. Reversal of 63-day Twiggs Momentum below zero would strengthen the bear signal.

ICE Brent Crude Afternoon Markers

* Target calculation: 108 – ( 117 – 108 ) = 99

Nymex WTI Light Crude is similarly headed for a test of primary support at $76/$78 per barrel. The 63-day Twiggs Momentum peak below zero warns of a primary down-trend.

Nymex WTI Light Crude

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.