Tag: Spot Silver

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Gold: Is it flagging?

Gold is now in the fourth week of a flag formation and is testing support at $1250/ounce. The best flag signals are in weeks 3 or 4. With no immediate prospect of a breakout, this raises the question: is gold losing momentum?

Gold

Increased likelihood of a Fed interest rate hike has certainly taken some wind from the sails …..as has recent Chinese stimulus which at least postponed (but not averted) Yuan devaluation against the Dollar. While this affected short to medium-term prospects, factors driving long-term demand for gold are unaltered. From a technical view, narrow candle ranges over the last 4 days suggest increased buying at the $1250 support level. And breakout above the flag remains a buy signal ……at least into the fifth week.

Silver experienced a much sharper sell-off, but on the weekly chart still looks likely to respect support at $16.00/ounce. Respect would suggest another test of resistance at $18.00 to $18.50.

Silver

On the weekly chart gold remains on track for a test of $1300/ounce. For as long as support at $1200 holds, we retain our bullish view on gold.

Gold

* Target calculation: 1300 + ( 1300 – 1050 ) = 1550

With the added incentive of a weakening Aussie Dollar, Australian gold stocks, represented here by the All Ords Gold Index (XGD), remain in a strong primary up-trend. A 13-week Twiggs Money Flow trough above zero and breakout above the recent trend channel are both bullish signs.

All Ords Gold Index (XGD)

Disclosure: Our Australian managed portfolios are invested in gold stocks.

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Gold: The final nail

Gold respected its new resistance level after a brief retracement and is again testing short-term support at $1065/ounce. 13-Week Twiggs Momentum peaks below zero indicate a strong primary down-trend. Breach of support is likely and would provide further confirmation of a decline to $1000/ounce*.

Spot Gold

* Target calculation: 1100 – ( 1200 – 1100 ) = 1000

Spot silver has also broken long-term support, reinforcing the gold signal.

Spot Silver

The Gold Bugs Index, representing un-hedged gold stocks, is testing primary support at 105. Failure of support is likely and would be the final nail in the coffin (for gold).

Gold Bugs Index

The stronger Dollar is weakening demand for gold, with the Dollar Index testing resistance its 12-year high at 100. Rising 13-week Twiggs Momentum indicates a healthy (primary) up-trend. Breakout above 100 is very likely and would signal an advance to 107*.

Dollar Index

* Target calculation: 100 + ( 100 – 93 ) = 107

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Gold Bugs warn of a bear market

Silver is testing long-term support at $15/ounce. Breach is likely, with 13-week Twiggs Momentum peaking below zero, indicating continuation of the down-trend.

Silver

Gold is similarly testing primary support at $1140/ounce. 13-Week Twiggs Momentum also peaked below zero, suggesting continuation of the down-trend. Breach of support would offer a target of $1000*.

Spot Gold

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

Stocks of major producers like Barrick Gold are also testing primary support. 13-week Twiggs Money Flow below zero indicates a primary down-trend.

Barrick Gold

The Gold Bugs Index, representing un-hedged gold stocks, has already departed. Breach of the band of primary support between 150 and 155 warns of a bear market for gold.

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 finds support

Gold rallied off support at $1180 and is likely to test $1250/ounce. But the primary trend, as indicated by 13-week Twiggs Momentum (below zero), remains down. Respect of resistance at $1250 would confirm this. Breach of primary support at $1180 would offer a long-term target of $1000*.

Spot Gold

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

Silver is also in a primary down-trend, retracing to test the new resistance level at $18.50/$19.00 per ounce. Respect would confirm the target of $15.50/ounce*.

Spot Silver

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

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Gold breaks support

Spot gold broke support at $1200/ounce, warning of a primary down-trend to test $1000*. Follow-through below $1180 would confirm. 13-Week Twiggs Momentum below zero already signals a primary down-trend.

S&P 500 VIX

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

Spot silver has already broken primary support and gold is expected to follow.

S&P 500 VIX

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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 and silver fall

Gold respected the new resistance level at $1240 after a brief retracement, confirming a primary down-trend. Declining 13-week Twiggs Momentum below zero strengthens the bear signal. Expect further support at $1200/ounce, breach would add further confirmation.

Spot Gold

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

Silver is testing primary support at $18.50 per ounce. Breach of support would signal a down-trend and strengthen the bear signal for gold. Respect is unlikely, but would suggest further consolidation.

Spot Silver

Interest Rates and the Dollar

A rising Dollar and rising Treasury yields both put downward pressure on gold.

The Dollar Index is testing resistance at the 2013 high of 84.50. Rising 13-week Twiggs Momentum above zero signals a primary up-trend. Reversal below 81.50 is most unlikely. Upward breakout would offer a long-term target of 89*.

Dollar Index

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

The yield on ten-year Treasury Notes broke resistance at 2.50 percent and is now consolidating at 2.60. Follow-through above 2.65 would signal an advance to 3.00. Respect would signal a decline to 2.00 percent*. 13-Week Twiggs Momentum recovery above zero would suggest a primary up-trend.

10-Year Treasury Yields

* Target calculation: 2.65 + ( 2.65 – 2.30 ) = 3.00

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