Gold, silver and the Dollar

A long-term chart of silver shows strong support at $15/ounce. Recovery above $18 and 13-week Twiggs Momentum above zero would suggest that the precious metal has bottomed. A bullish sign for gold.

Silver

The picture for gold is less clear, with further tests of primary support at $1140/ounce expected. 13-Week Twiggs Momentum is also rising and recovery above zero would be a bullish sign. But breakout above $1300 is unlikely at present. Breach of support at $1140 would offer a target of $1000*.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

Stocks of major gold producers like Barrick Gold remain bearish.

Barrick Gold

The Dollar Index respected its declining trendline, warning of another test of primary support at 93. Breach of support would signal a primary down-trend. A weaker Dollar would boost demand for gold and lift the US economy, enhancing the competitiveness of exporters and local manufacturers facing competition in domestic markets.

Dollar Index

Long-term interest rates are rising, however, and provide support for the Dollar. 10-Year Treasury yields respected their new support level at 2.25% and are likely to test long-term resistance at 3.0 percent. Rising 13-week Twiggs Momentum above zero, strengthens the signal.

10-Year Treasury Yields

2 thoughts on “Gold, silver and the Dollar

  1. Jay Towner says:

    Not sure the gold market is dismissing the Grexit..it’s more complicated..gold is finding it’s level,and an uncertain level it is due to deleveraging and possible deflation.
    Gold is a victim of uncertainty in the tugowar between inflated equities and deleveraging..in simple terms Gold may have made it’s mind up,but is being corralled by those that think they are smarter than gold (real money)…and they are powerful sheriffs.
    We don’t know yet..the market could well panic in the near future..just because it hasn’t yet..does not mean it wont happen..
    I feel the market/s are the fox/rabbit in the hunters spot light..too afraid to move one way or the other..
    Is gold expensive at $1160 US ..yes of course it is !
    Will you want some if china blows up..yes of course you will..I don’t know where gold is going..the charts say down,and that is very possible..at some point..soonish..I feel that people might like to have more than they have..you know ..as Chalrlie Munger would say..”it’s a cavemans investment…” BUT..as Warren Buffett would say ” The are playing musical chairs on the Titanic and when the tide goes out we’ll see who isn’t wearing bathers” paraphrasing a tad..gold will have it’s day..eventually.
    Cheers,Jay Towner.

    • ColinTwiggs says:

      The primary force working against gold is deflation as the global economy faces the end of the vast credit expansion of the last 4 decades.

      $60 Trillion Global Credit

      Gold prices will continue to spike from time to time when some international crisis causes investors to flee to a safe haven. But that is the exception (hopefully) and not the norm.

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