Gold looks for support as Dollar retraces

Spot Gold is retracing to test support after a strong advance to $1350/ounce. Respect of the rising trendline would signal another strong advance but a stronger correction, respecting support at $1300 is more likely. The immediate target for another advance is the 2016 high of $1375. Rising Twiggs Trend Index indicates buying pressure. Breach of support at $1300 is unlikely at present.

Spot Gold

Target 1300 + ( 1300 – 1200 ) = 1400

Gold is supported by a weakening Dollar, with the Dollar Index retracing to test its new resistance level after breaking primary support at 92. Respect of resistance is likely and would confirm the long-term target of 83*.

Dollar Index

*Target: 93 – ( 103 – 93 ) = 83

Rising crude oil prices would also be bullish for gold, increasing inflationary pressure and also easing pressure on oil-producing states to sell off gold reserves accumulated when oil prices were high. Nymex Light Crude is testing resistance at $50/barrel. Upward breakout would suggest that the recent down-trend has ended — a bullish sign for gold.

Nymex Light Crude

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