Gold hesitates on dollar strength

Spot gold displays a small flag consolidation, suggesting continuation of the advance to test $1800/ounce. Breach of the descending trendline indicates that the down-trend has ended and breakout above $1800 would signal an advance to $2100*. Respect of the zero line by 63-day Twiggs Momentum would strengthen the signal. A strengthening dollar, however, would weaken demand for gold.
Spot Gold

* Target calculation: 1800 + ( 1800 – 1500 ) = 2100

The US Dollar Index found support above 78. Recovery above 80 would indicate another test of resistance at 82. Rising 63-day Twiggs Momentum continues to signal a strong up-trend. Breakout above 82 would confirm the target of 85*.

US Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

2 thoughts on “Gold hesitates on dollar strength

  1. Ali says:

    I use different technical indicators and I reach to a similar conclusions to yours on the dollar index. Thank you.

    Ali, CFTe

  2. Hal Martin says:

    $GVZ gold volatility in a falling wedge, decoupled from $VIX on the 9th of feb, but looks like it may have a little room on the down side.

    Go figure why gold would stand up here, since I smell another credit contraction coming—–where nothing is likely spared.

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