Spot Silver is testing support at $15 per ounce. Breach would signal a primary down-trend.
And warn of a bear market for gold.
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.
* 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.
Silver failed to rally in concert with gold, instead consolidating in a narrow range which suggests further weakness. Another bearish sign for gold.
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*.
* 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 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*.
* 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*.
* Target calculation: 18.5 – ( 21.5 – 18.5 ) = 15.5
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.
* Target calculation: 1200 – ( 1400 – 1200 ) = 1000
Spot silver has already broken primary support and gold is expected to follow.
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.
* 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.
* 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.
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.
* 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.
* Target calculation: 2.30 – ( 2.60 – 2.30 ) = 2.00
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.
* 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.
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*.
* 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.
* Target calculation: 2.65 + ( 2.65 – 2.30 ) = 3.00
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.
* 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.
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.
Gold faces conflicting forces
- Treasury yields are falling
- The Dollar is weakening
- Inflation expectations are falling
- Gold and silver are testing support
Interest Rates and the Dollar
The yield on ten-year Treasury Notes closed below support at 2.60 percent, warning of another decline. Follow-through below 2.50 percent would signal a primary down-trend, with an immediate target of 2.00 percent*. Reversal of 13-week Twiggs Momentum below zero also suggests weakness. Recovery above 2.80 is unlikely at present, but would indicate another advance.
* Target calculation: 2.50 – ( 3.00 – 2.50 ) = 2.00
The Dollar Index is heading for a test of primary support at 79.00. Peaks below the zero line on 13-week Twiggs Momentum signal a primary down-trend. Breach of primary support at 79.00 would confirm, offering a target of 76.50*. Recovery above 80.50 is unlikely, but would signal that the index has bottomed.
* Target calculation: 79.0 – ( 81.5 – 79.0 ) = 76.5
Gold and Silver
Gold faces conflicting forces: low inflation reduces demand for precious metals, but low interest rates and a weaker Dollar increase demand.
Spot gold continues to test support at $1300/$1280 per ounce. Failure of support would indicate a test of primary support at $1200, but long tails and 13-week Twiggs Momentum recovery above zero indicate that another test of $1400 remains as likely.
Silver is more bearish and failure of primary support at $19/ounce would offer a target of $16*. Respect of the zero line (from below) by 13-week Twiggs Momentum suggests continuation of the primary down-trend. A down-swing on silver would be likely to be followed by gold. Recovery above $22/ounce is less likely, but would signal a primary up-trend.
* Target calculation: 19 – ( 22 – 19 ) = 16
Gold and inflation
Inflation expectations are falling, as suggested by a weaker gold price and treasury yields. The Dollar, however, is also weakening in response to low interest rates and should provide some support for precious metal prices.
Interest Rates and the Dollar
The yield on ten-year Treasury Notes is falling, reflecting a dovish outlook on inflation, and testing the base of the recent consolidation at 2.60 percent. Breach of primary support at 2.50 percent would signal a primary down-trend, with an immediate target of 2.00 percent*. Reversal of 13-week Twiggs Momentum below zero also warns of weakness. Recovery above 2.80 is less likely, but would suggest another advance.
* Target calculation: 2.50 – ( 3.00 – 2.50 ) = 2.00
The Dollar Index is heading for a test of primary support at 79.00. Peaks below the zero line on 13-week Twiggs Momentum suggest a primary down-trend. Breach of primary support at 79.00 would confirm, offering a target of 76.50*.
* Target calculation: 79.0 – ( 81.5 – 79.0 ) = 76.5
Gold and Silver
Spot gold found support at $1280/ounce, but narrow candles for the last two weeks indicate an absence of buying pressure. Reversal below $1280 would test primary support at $1200. Completion of a 13-week Twiggs Momentum trough above zero would be a bullish sign, although breakout above $1400 remains unlikely.
Silver is more bearish and failure of primary support at $19/ounce would signal continuation of the primary down-trend, offering a target of $16. Bullish divergence on 13-week Twiggs Momentum, however, points to an up-trend and breakout above $22 would confirm. Behavior of silver is likely to be mimicked by gold (and vice versa). This is a tough one to call and the outcome may well be further consolidation.
