Rising Dollar suggests lower gold and commodities

The Dollar Index is testing medium-term support at 81.00/81.50. Respect would confirm a healthy primary up-trend. Reversal below the rising trendline is unlikely, but would indicate trend weakness. Another trough above zero on 63-day Twiggs Momentum would strengthen the bull signal.

Dollar Index

* Target calculation: 81 + ( 81 – 78 ) = 84

Gold displays strong buying support above $1500 with four long tails on the weekly chart. Recovery above $1700/ounce would suggest a new primary up-trend, but the rising dollar warns of weakness. Reversal below $1600 would strengthen the bear signal from 63-day Twiggs Momentum declining below zero.

Spot Gold

* Target calculation: 1550 – ( 1800 – 1550 ) = 1300

Brent crude is consolidating after breaking support at $100/barrel. Respect of the new resistance level would warn of another decline, while reversal would test $110.

IPE Brent Afternoon Markers

* Target calculation: 100 – ( 125 – 100 ) = 75

The Nymex WTI Light Crude is similarly consolidating below $85/barrel. Respect of the new resistance level would indicate a decline to $75/76 per barrel.

Nymex WTI Light Crude

The broader CRB Commodities Index found short-term support at 265 as the dollar weakened, but is likely to follow through to long-term support at 250 as the greenback strengthens. 63-Day Twiggs Momentum oscillating below zero warns of a strong down-trend.

CRB Commodities Index

7 thoughts on “Rising Dollar suggests lower gold and commodities

  1. phillip ross hammond says:

    As usual im on target thanks to Colin Twigs. I have been following his reports for nearly five years now and he still never ceases to amaze me.
    Thanks Colin

  2. Mike Krol says:

    What I find amazing, [as i also have created a few Indicators] is that The uptrend in the Dollar Index trend line confirmed by the lows on aprox. end of Aug and October set up up the May Support around 7 moths later! I find this happening in all types of markets. Also the fact that once a trend line is broken, most people through it away, while I find if extended out in time and price returns to that S/R line it WILL affect price and if you have been keeping track vs disregarding the break a long time ago, it gives you an advantage knowing how it reacts to it, and verified by Indicators can give the trader inside information as to if it respects it or passes through it verifies a strong trend that again with indicators gives you an edge!

    I hope that made sense to all of you out there but I was making my own charts back in the early 1990’s before all the Data Feed services were available. That hard work turned into experience I am glad I have but would not want to do all that Data and Chart graphing by hand again for nothing! (It took hours and hours doing that for all the markets)

    Anyway I just wanted to let you know about what I have proven to myself and still have the Old Charts proving that years can even be involved in certain markets along with the knack of drawing the Low to Lows, or high to high’s, even Highs to lows depending on the markets Rhythm that develops the pattern/system over time, creating different reasons why some Indicators work then suddenly break down and stop working. The Indicator(s) really do not stop working, it is because that the markets Rhythm and has changed.

    I would like to ad that a markets change from Bullish to bearish can not always be predicted all the time at every point in time with a 100 % accuracy of prediction due to this world market and government sudden interventions that never happened before when I first started trading Futures in the 90’s. I was taught back then by people like Larry Williams, Welles Wilder, etc.. to only trade commodities due to the fact of no Government involvement and being free open markets. Today it is obvious because of the world’s changes that this does now happen and can be frustrating.

    Anyone willing to stick their neck out and say I’m bullish or bearish on crude or whatever the market is has to have their reason for doing so, and people that do not understand the fact of this World’s Market sudden changes, and the forecast being wrong show that they are looking for a 100% indicator for all market situations, when due to this world’s forces pushing and able to change over-night for no reason needs to study a little more and go for more solid pattern development along with Indicators while realizing that keeping the stops tight, loose a little and re-enter if necessary is better than doing what most people do and ride loosing trades, then when they have a good position they take profits too early.

    This always leads to a record that can be skewed with I have more winning trades than loosing trades, so WHY am I loosing money?… It takes awhile to develop a system that you can trust and pull the trigger when you should, and remember that the market is never wrong. The market will do what it will and we traders need to be prepared for an earl exit, and sometimes even harder is sticking to a system and letting the profits build. Pulling the trigger to enter a trade is even harder after loosing often, only to see the market do exactly what you thought it would do and see all the profits you could have had. It is a very frustrating situation for beginning traders due to all the Indicators, all the systems, all the market Rhythms that affect if a indicator will work as instructed by the creator.

    I find that if something is not working actually tells more about the market than if it is working.
    Please hang in there to all traders trying to figure things out. When I started at an easier time to learn, it was common rule that if you could make it for 1-2 years without having to add to your margin account was a great sign showing that you can be a good to great trader. There is a lot to learn. I have never found anything else that can be as rewarding as trading though.

  3. Voltaire says:

    Seems only about a week or so ago you were bullish on everything.

    • ColinTwiggs says:

      Here are the newsletter headings since late April 2012:

      2012-06-28: Dollar rebound drives gold and commodities lower
      2012-06-21: Rising Dollar suggests lower gold and commodities
      2012-06-14: Dollar, gold, crude oil and commodities
      2012-06-07: Stronger dollar, weaker commodities: gold, copper and crude
      2012-05-31: Commodities lead stocks lower
      2012-05-24: Gold suffers from strong dollar
      2012-05-17: Dollar rallies while Gold & Silver fall
      2012-05-09: Gold breaks support at $1600/ounce
      2012-05-03: Commodity and stock prices diverge
      2012-04-26: Dollar and gold test key support levels

      Regards, Colin

      • ColinTwiggs says:

        …or are you referring to this?

        2012-06-18: S&P 500 and Dow: correction is over

        There was a breakout on the Dow/S&P 500, but it got smashed on Day #5 (June 21st).

  4. […] falling crude oil prices have weakened Canada’s Loonie relative to the Aussie Dollar. Against the greenback, the […]

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