Gold finds support as the Dollar falls

The Dollar Index crashed on this week’s Trump turmoil. Follow-through below 98.50 confirms a primary down-trend with a medium-term target of the 2016 low at 93.

Dollar Index

* Target: 99 – ( 104 – 99 ) = 94

Spot Gold found support at $1250 after Thursday’s retracement. Follow-through above $1260 would indicate another primary advance, with a target of $1300. Reversal below $1220 is unlikely but would signal a primary down-trend.

Spot Gold

Trump Turmoil

Discussion of a possible impeachment action against President Donald Trump is rife in the media and seems to have spooked financial markets.

The Dollar Index fell through support at 98.50, signaling another decline. The long-term target is 93.00.

Dollar Index

Gold rallied, breaking through resistance at $1250/ounce. Follow-through above $1300 would signal another advance, with a target of the 2016 high at $1375.

Spot Gold

Dow Jones Industrial Average retreated from resistance at 21000. Expect a test of medium-term support at 20400. Reversal below 20000 would be cause for concern.

Dow Jones Industrial Average

The S&P 500 is headed for a test of medium-term support at 2320. Breach would likewise signal a strong correction.

S&P 500

We are likely to get a secondary correction but I expect the bull market to continue. Impeachment of Trump would be a temporary setback and would make me more bullish on the long-term outlook.

It’s probably better to have him inside the tent pissing out,
than outside the tent pissing in.

~ President Lyndon Johnson on FBI Director J. Edgar Hoover whom he mistrusted

Gold hesitates

The Dollar Index rally ran into resistance at 100. Reversal below last week’s low would signal a medium-term decline to 94*.

Dollar Index

* Target: 99 – ( 104 – 99 ) = 94

Spot Gold found short-term support at $1220. Recovery above $1250 would signal resumption of the primary up-trend but a test of $1200 is more likely and breach would signal reversal to a primary down-trend.

Spot Gold

Gold falls despite weak Dollar

Commodities are falling, with the DJ-UBS Commodity Index testing support at 82.

DJ-UBS Commodity Index

Despite the Dollar Index breaking support at 100.

Dollar Index

Spot Gold followed, breaking medium-term support at $1240/$1250. A test of primary support at $1200/ounce is now likely.

Spot Gold

Breach of $1200 would signal a primary down-trend. Respect would confirm the primary up-trend. I still view gold stocks as a form of “Trump insurance” and am reluctant to part with exposure to this sector.

Weak Dollar strengthens gold outlook

The Dollar Index broke support at 100 despite strengthening interest rates, warning of a down-trend. Target for a decline would be the May 2016 low of 93.

Dollar Index

China has burned through a trillion dollars of foreign reserves in the last 3 years, attempting to support the yuan. I believe the sell-off is unlikely to abate and plays a major part in the Dollar’s weakness.

China: Foreign Reserves

A falling Dollar would strengthen demand for gold. Spot Gold is retracing from resistance at $1300/ounce and is likely to find support at $1240/$1250. Respect of support would suggest another advance; confirmed if gold breaks $1300.

Spot Gold

Spot Silver displays a more bearish medium-term outlook, however, with a stronger correction testing support at $17.00/ounce. Breach of support would test the primary level at $15.65 and warn of further gold weakness.

Spot Silver

Gold advance likely

The Dollar Index continues to test support at 100 despite strengthening interest rates. China’s sell-off of foreign reserves to support the Yuan may be contributing to this weakness.

Dollar Index

Spot Gold is consolidating below resistance at $1300/ounce. A more confrontational US foreign policy is contributing to global uncertainty and demand for precious metals.

Spot Gold

Breakout above $1300 is likely and would signal a test of the 2016 high at $1375.

Gold surges on North Korea fears

The Dollar Index is testing support at 100 on fears of further escalation in the stand-off with North Korea.

Dollar Index

Spot Gold broke resistance at $1260/ounce, offering an immediate target of $1300. Recovery of 13-week Twiggs Momentum above zero signals resumption of the primary up-trend.

Spot Gold

Gold bullish as Dollar finds support

10-year Treasury Yields are consolidating around the 2.5% level. Upward breakout is likely and would signal an advance to 3.0%.

10-year Treasury Yields

The Dollar Index has found support, with a large engulfing candle at 100. Recovery above the descending trendline would suggest a fresh advance, with a target of 108*. Reversal below 99 is unlikely but would warn of a test of primary support at 93.

Dollar Index

* Target calculation: 104 + ( 104 – 100 ) = 108

China’s Yuan continues to weaken, with USDCNY in a strong up-trend. Shallow corrections flag buying pressure. 13-week Twiggs Momentum oscillating above zero indicates a strong up-trend.

USDCNY

Spot Gold is testing support at $1240/$1250 an ounce. Recovery above $1260 is likely and would signal an advance to $1300.

Spot Gold

Gold benefits from Dollar fall

The Dollar Index continues its downward path, having breached support at 100. Follow-through below the rising trendline at 99 would warn of a test of primary support at 93.

Dollar Index

Spot Gold has benefited. Currently testing resistance at $1250/ounce, narrow consolidation is a bullish sign. Follow-through above $1260 would confirm a target of $1300. Crossover of 13-week Momentum to above zero is also bullish, suggesting a primary up-trend.

Spot Gold

Gold rallies as Dollar falls

The Dollar Index rally is falling despite rising interest rates. Chinese sell-off of foreign reserves to support the Yuan may be a factor.

Dollar Index

Spot Gold rallied off support at $1200/ounce. Recovery above $1250 would confirm an up-trend, with the next target at $1300.

Spot Gold

Gold bears grow as Fed hints at rate hike

The Fed is expected to hike interest rates next week. 10-year Treasury yields broke resistance at 2.5 percent, signaling an advance to the 2013/2014 high of 3.0 percent. Breakout above 3.0 percent is still a way off but would complete a large double bottom signaling the end of the 30-year secular bull market in bonds. Rising interest rates are bearish for gold.

10-year Treasury Yields

The Dollar Index rally continues to meet resistance, with tall shadows on the last four weekly candles signaling selling pressure. Rising interest rates could strengthen the advance, with bearish consequences for gold, but Chinese sell-off of foreign reserves (to support the Yuan) is working against this.

Dollar Index

Spot Gold is testing support at $1200/ounce. Recovery above $1250 would indicate that the recent down-trend has ended. But breach of support is more likely and would warn of another test of long-term support at $1050/ounce.

Spot Gold

Gold hesitates as Fed hints at rate hike

From WSJ:

Federal Reserve Chairwoman Janet Yellen signaled the central bank is likely to raise short-term interest rates at its March meeting and suggested more increases are likely this year if the economy performs as expected.

“At our meeting later this month, the [Federal Open Market] Committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate,” Ms. Yellen said in remarks prepared for delivery at the Executives’ Club of Chicago.

The Dollar Index rally continues to meet resistance, with tall shadows on the last three weekly candles signaling selling pressure. Rising interest rates would strengthen the advance, with bearish consequences for gold.

Dollar Index

Spot Gold hesitated at $1250/ounce. Rising interest rates also increase the opportunity cost of holding precious metals. Reversal below $1200 would warn of another decline but recovery above $1250 remains more likely and would signal an advance to $1300.

Spot Gold

Gold breaks through $1250

10-Year Treasury Yields are testing support at 2.30%. Expect this to hold. Breach of the rising trendline would warn of a correction but this seems unlikely with the Fed intent on normalizing interest rates. Breakout above 2.50% would offer a target of 3.0%.

10-Year Treasury Yields

The Dollar Index rally remains muted since finding support at 100. Rising long-term yields would fuel the advance, with bearish consequences for gold.

Dollar Index

China’s Yuan is consolidating. Resistance on USDCNY at 7 Yuan is likely to be tested soon.

USDCNY

The PBOC has been burning through its foreign reserves to slow the rate of depreciation against the Dollar, to create a soft landing. A sharp fall would destabilize global financial markets and fuel capital flight from China.

China Foreign Reserves

Spot Gold broke through resistance at $1250, signaling an advance to $1300.

Spot Gold

Interest rates bearish for gold

10-Year Treasury Yields are consolidating below resistance at 2.50%. Long tails suggest medium-term buying pressure. Breakout is likely and would offer a target of 3.0%.

10-Year Treasury Yields

The Dollar Index rally has so far been muted since finding support at 100. But rising long-term yields are likely to fuel the advance, with bearish consequences for gold.

Dollar Index

Spot Gold is consolidating below $1250/ounce. Reversal below $1200 would warn of another decline. Breach of primary support at $1130 would confirm. Arguments for a further advance appear weak, but breakout above $1250 would signal an advance to $1300.

Spot Gold

Gold rallies but Dollar bottoms

Rising uncertainty has fueled an extended Gold rally. Respect of support at $1200/ounce suggests another advance, this time to $1300, but a lot will depend on the Dollar.

Spot Gold

The Dollar Index, however, found support at 100. Respect would suggest another advance and a primary up-trend. With bearish consequences for gold.

Dollar Index

Gold rises as Dollar falls

The Dollar Index has been falling since the start of the year. Respect of support at 100, however, would signal a primary up-trend.

Dollar Index

Gold advanced as the Dollar fell. Support at $1200/ounce suggests another advance, this time to $1300, but a lot will depend on the Dollar.

Spot Gold

Gold falls as the Fed hikes rates

10-Year Treasury yields jumped above resistance at 2.5 percent after the latest Fed rate hike. Penetration of the long-term descending trendline warns that the secular down-trend is ending. Expect a test of the 2013/2014 high at 3.0 percent. Breakout would confirm the long-term down-trend has ended.

10-Year Treasury Yields

The Dollar Index respected its new support level at 100, signaling an advance to 107*.

US Dollar Index

* Target medium-term: 100 + ( 100 – 93 ) = 107

Gold continued its descent in response to rising interest rates and a stronger Dollar. Steps by the Chinese government to limit private gold purchases, in an attempt to support the Yuan, will also impact on demand. Target for the decline is unchanged at the December 2015 low of $1050/ounce. Retracement that respects the resistance level at $1200 would further strengthen the bear signal.

Spot Gold

Gold declines as interest rates rise

The Fed is expected to hike interest rates in December. Long-term interest rates are rising in anticipation of further rate hikes in 2017. 10-Year Treasury yields have penetrated their 10-year descending trendline, warning that the secular down-trend is ending. Breakout above 2.50 percent would strengthen the signal, while follow-through above the 2013/2014 high of 3.0 percent would confirm.

10-Year Treasury Yields

The Dollar Index successfully tested its new support level at 100. Target for the advance is 107*.

US Dollar Index

* Target medium-term: 100 + ( 100 – 93 ) = 107

With interest rates rising and the Dollar strengthening, demand for Gold is shrinking. Steps by the Chinese government to limit private gold purchases, part of their program to support the Yuan by slowing capital flight, will also impact on demand. Target for the decline is unchanged at the December 2015 low of $1050/ounce. Retracement that respects the resistance level at $1200 would strengthen the bear signal.

Spot Gold