Spot Gold broke its long-term rising trendline and support at $1600, warning of a primary down-trend. Reversal of 63-day Twiggs Momentum below zero strengthens the signal. Failure of primary support at $1500 would confirm, offering a target of $1200*. Recovery above $1600 would indicate all bets are off.
* Target calculation: 1500 – (1800 – 1500) = 1200
The Gold Bugs Index, representing un-hedged gold stocks, has been suggesting a gold down-trend for some time.
The Dollar Index broke through resistance at 80 on the weekly chart and a 63-day Twiggs Momentum trough above zero indicates another rally. Expect a test of 82 in the next few weeks, mirrored by a weakening gold price.
* Target calculation: 82 + ( 82 – 78 ) = 86