Gold, Silver and Treasury yields

10-Year Treasury yields retraced from resistance at 2.0% this week but rising Trend Index troughs indicate upward pressure on yields. Breakout above 2.0% would strengthen the signal. Higher long-term rates would increase the opportunity cost of holding Gold, reducing demand.

10-Year Treasury Yields

China’s Yuan penetrated its descending trendline against the Dollar. Similarities between the two patterns (above and below) suggest that China is reducing purchases of Treasuries, increasing upward pressure on yields.

Chinese Yuan CNY/USD

Rising yields would normally strengthen demand for the Dollar. Instead, declining Trend Index peaks warn of long-term selling pressure.

Dollar Index

Gold found short-term support at $1450/ounce but further rises in Treasury yields would increase the selling pressure highlighted by declining peaks on the Trend Index.

Gold (USD/ounce)

Silver broke support at $17.00/ounce, with an even steeper fall on the Trend Index warning of a further decline on Silver and Gold.

Silver (USD/ounce)

Australia’s All Ordinaries Gold Index continues its downward trend channel, headed for secondary support at 6000. Declining Trend Index peaks again warn of strong selling pressure. Respect of 6000 would signal that the primary up-trend is intact, while breach and a test of primary support at 5400 would again warn of trend weakness.

All Ordinaries Gold Index

Patience

Gold is in a long-term up-trend. A correction may offer an attractive entry point but we first need to confirm that the up-trend is intact before increasing exposure to gold stocks.

Australian Gold: Patience required

Gold, measured in Australian Dollars, is in a bearish descending triangle, testing support at $2150/ounce. A sharp fall on the Trend Index, with a peak below zero, warns of strong selling pressure.

Gold (AUD/ounce)

The All Ordinaries Gold Index recently broke support at 7200, warning of a decline to 6000. Again, a declining Trend Index warns of selling pressure.

All Ordinaries Gold Index

Patience is required. Gold is in a long-term up-trend, with a target of the 2012 high at $1800/ounce. A correction may offer an attractive entry point but further falls are expected before the advance resumes.

Gold selling pressure continues

Selling pressure on gold continues, with the SPDR Gold [GLD] ETF consolidating in a bearish narrow band above support at 119. Twiggs Money Flow below zero warns of long-term selling pressure. Continuation of the down-trend is likely and breach of 119 would signal another decline.

SPDR Gold

Spot gold displays a similar narrow consolidation at $1250/ounce. Continuation is likely and would test primary support at $1200.

Spot Gold

The ASX All Ordinaries Gold Index recovered above resistance at 4500 but has so far respected the descending trendline. Respect is likely and reversal below 4300 would signal a decline to 4000.

All Ordinaries Gold Index

Gold rallies

Spot Gold rallied to test resistance at $1350/ounce. Momentum above zero continues to indicate a primary up-trend. Short retracement (short candles and short duration) would signal a test of the July 2016 high at $1375. Breakout above $1375 would offer a target of $1450*. Breach of support at $1300 is unlikely but would warn of a test of primary support at $1200/ounce.

Spot Gold

* Target calculation: 1375 + ( 1375 – 1300 ) = 1450

In Australia the All Ordinaries Gold Index ($XGD) found support at 4500. Expect a test of the recent highs around 5500. The Index is likely to follow the spot gold price, provided the Australian Dollar/US Dollar remains fairly stable. Breakout above 5500 would signal a fresh advance, with a target of 6500*. Breach of 4500 is unlikely but would warn of trend reversal.

All Ordinaries Gold Index $XGD

* Target calculation: 5500 + ( 5500 – 4500 ) = 6500

Aussie gold stocks shine

Australian gold stocks have had a good run since the index (XGD) broke resistance at 2800. At some stage there is bound to be a correction but the up-trend now looks pretty robust, rising 13-week Money Flow confirming buying pressure.

XGD