Australian gold stocks rally despite stronger Dollar

Interesting turn in the gold/dollar saga.

The US Dollar Index is strengthening, testing resistance at 91. Bullish divergence on the Trend Index indicates buying pressure.

Dollar Index

The Dollar is strengthening despite rising crude prices which generally weaken the Dollar.

WTI Light Crude

Spot Gold is retreating from resistance at $1350/ounce. Bearish divergence on the Trend Index warns of selling pressure. Expect a test of $1300.

Spot Gold

But Australian gold stocks are strengthening. The All Ordinaries Gold Index is rallying to test resistance between 5000 and 5100.

All Ordinaries Gold Index

That’s because the Australian Dollar is falling at a faster rate than the Dollar Index is strengthening.

AUDUSD

So the price of gold in Australian Dollars is actually rising.

Spot Gold in Australian Dollars

Leaving Australian gold stocks unperturbed by the strengthening US Dollar.

Gold & Dollar: The big picture

Continuing with long-term, monthly charts, the Dollar Index is in a primary down-trend. The latest rally is likely to respect resistance at 92. Breach of support at 88 would signal another decline.

Dollar Index

* Target calculation: 91 – (95 – 91) =87

Gold has formed a broad base over the last 4 years. Breakout above resistance at $1350 per ounce is likely in the long run, aided by a weaker Dollar, and would signal a primary advance.

Spot Gold

The All Ordinaries Gold Index is in a primary up-trend. The large ascending triangle is testing resistance at 5000/5100. Breakout would signal a primary advance with a long-term target of 6000*. But the declining Trend Index warns of medium-term selling pressure and penetration of the rising trendline would warn that momentum is slowing.

All Ords Gold Index

* Target calculation: 5000 + (5000 – 4000) = 6000

Gold waits on the Dollar

The Dollar Index continues to consolidate below resistance at 90.50. Downward breakout is likely and would offer a target of 87*.

Dollar Index

* Target calculation: 91 – (95 – 91) =87

Gold is ranging between $1300 and $1350 per ounce. A declining Dollar is bullish for gold. Breakout above $1375 would offer a target of $1450*.

Spot Gold

* Target calculation: 1350 + (1350 – 1250) = 1450

The All Ordinaries Gold Index is testing resistance at 5100. Upward breakout would signal a primary advance with a long-term target of 6000*.

All Ords Gold Index

* Target calculation: 5000 + (5000 – 4000) = 6000

Gold rallies as Dollar meets resistance

The Dollar rally ended, with the Dollar Index encountering stubborn resistance at 90.50. Expect a test of primary support at 88.50. Breach of support would signal a primary decline.

Dollar Index

* Target calculation: 91 – (95 – 91) =87

Gold found support at $1310 and is likely to again test resistance at $1360. A declining Dollar would be bullish for gold. Breakout above $1360 would offer a target of $1450*.

Spot Gold

* Target calculation: 1350 + (1350 – 1250) = 1450

The All Ordinaries Gold Index has been undermined by the strong Aussie Dollar but found support at the rising trendline. Expect another test of resistance at 5100. Breakout would signal a primary advance.

All Ords Gold Index

Dollar drives long-term Gold prospects

The Dollar is likely to continue weakening over the next few years according to analysis from a number of major banks. A falling Dollar would be a bull signal for gold investors.

The Dollar Index rallied over the past few days but is likely to encounter stubborn resistance at 90.50. Respect is likely and would signal another test of support at 88.50. Breach of support would warn of another primary decline.

Dollar Index

* Target calculation: 91 – (95 – 91) =87

Gold lacks direction, ranging between 1310 and 1360, but that would change dramatically if the Dollar breaches support at 88.50. Breakout above $1360 would signal another primary advance, with a target of $1450*. Follow-through above $1375 would strengthen the signal.

Spot Gold

* Target calculation: 1350 + (1350 – 1250) = 1450

The All Ordinaries Gold Index has been undermined by the strong Aussie Dollar. Further weakness of the greenback would help support commodity prices and the Aussie. But further gains on XGD remain likely and recovery above 5100 would signal another advance.

All Ords Gold Index

Dollar falls, Gold rises

The Dollar weakened, with the Dollar Index testing support at 88.50. Respect of new resistance at 91 — the last primary support level — confirms the strong down-trend. Completion of another Trend Index peak below zero would further strengthen the signal.

Dollar Index

* Target calculation: 91 – (95 – 91) =87

The extent of the Dollar’s fall is best illustrated against major trading partner China’s Yuan: a 9.5% fall in just over two years. And that is despite rising US interest rates and a $120 billion increase in China’s foreign reserves over the last year.

USDCNY

Gold is again testing resistance at $1350. Breakout would signal another primary advance, with a target of $1450*. Follow-through above $1375 would confirm.

Spot Gold

* Target calculation: 1350 + (1350 – 1250) = 1450

The All Ordinaries Gold Index has been undermined by the strong Aussie Dollar. But recovery above 5000 would signal another advance.

All Ords Gold Index

Dollar rallies, Gold retreats

On Friday President Donald Trump signed a $400 billion budget deal that sharply boosts spending and swells the federal deficit, ending a brief federal government shutdown. [CBS News]

The Dollar Index rallied as stock market volatility increased around the globe. Another test of resistance at 91 is likely. Respect would signal a decline to 87*.

Dollar Index

* Target calculation: 91 – (95 – 91) =87

Gold retreated as the Dollar rallied, confirming an earlier divergence on the Trend Index. Breach of primary support at $1250 remains unlikely.

Spot Gold

* Target calculation: 1350 + (1350 – 1250) = 1450

Long tails on the All Ordinaries Gold Index indicate buying support, fueled by a weakening Aussie Dollar. Recovery above 5000 would signal another advance.

All Ords Gold Index

Further (USD) Dollar weakness is likely to boost gold prices.

Gold and Dollar hesitate

The Dollar Index found short-term support at 89, having respected new resistance at 91. Trend Index peaks below zero warn of strong selling pressure. Expect a further decline to 87*.

Dollar Index

* Target calculation: 91 – (95 – 91) =87

Gold respected resistance at $1350 as the Dollar found short-term support. Bearish divergence on the Trend Index warns of secondary selling pressure, warning of a correction.

Spot Gold

* Target calculation: 1350 + (1350 – 1250) = 1450

A strong Aussie Dollar is holding back the All Ordinaries Gold Index. Respect of the rising trendline would signal another advance.

All Ords Gold Index

Further (USD) Dollar weakness is likely to boost gold prices.

Gold hesitates as Dollar retraces

The Dollar is retracing to test resistance. Dollar Index respect of the former primary support level at 91 would confirm a primary decline with a target of 87*. Trend Index peaks below zero warn of strong selling pressure.

Dollar Index

* Target calculation: 91 – (95 – 91) =87

Gold hesitated below resistance at $1350 as the Dollar retraced. Trend Index above zero indicates an up-trend. Breakout above $1350 is likely and would signal an advance with a target of $1450*.

Spot Gold

* Target calculation: 1350 + (1350 – 1250) = 1450

A strong Aussie Dollar is holding back the All Ordinaries Gold Index. Respect of the rising trendline is likely and recovery above 5000 would signal another advance.

All Ords Gold Index

Cessation of Chinese purchases of US Treasuries may not be permanent but will fuel Dollar weakness, improve the competitiveness of US exports in international markets, and boost dollar-denominated gold prices.

Gold Bounces

Gold bounced off support at $1240/ounce, ending the week with a strong rally. Penetration of the descending trendline would indicate the down-trend has weakened, while breakout above $1300 would suggest another advance. Twiggs Trend Index close to zero still indicates hesitancy.

Spot Gold

The greenback is weakening which is bullish for gold. Dollar Index reversal below 93 (and the rising trendline) would indicate another test of primary support at 91. A major Trend Index peak below zero would warn of another primary decline with a target of 87*.

Dollar Index

* Target calculation: 91 – (95 – 91) =87

Australia’s All Ords Gold Index is headed for another test of long-term resistance at 5000. Breakout would signal a primary advance.

All Ordinaries Gold Index

A weakening Aussie Dollar would strengthen demand for gold stocks. Respect of resistance at 77.5 US cents by the current bear rally would warn of a decline to test primary support at 73.5.

Australian Dollar AUDUSD

Gold finds short-term support

The greenback continues its bear market rally, assisted by the new tax bill and the December Fed rate hike. Breakout above resistance at 95 would signal a primary up-trend, a strong bear signal for gold, but the Dollar still has to overcome concerns over North Korea.

Dollar Index

Gold found short-term support at $1240/ounce and recovery above the descending trendline would indicate that the down-trend is weakening. Breach of primary support at $1200 is unlikely but would be a strong bear signal, warn of a primary down-trend.

Spot Gold

The All Ords Gold Index is also correcting. Breach of primary support at 4300 would warn of a primary down-trend.

All Ordinaries Gold Index

But I expect this to be cushioned by further weakness on the Aussie Dollar.

Australian Dollar/USD

Helped in part by a declining yield differential between Australian and US government bonds.

Differential between Australian and US 10-year Government Bonds

Gold falls

Gold broke support at $1250/ounce, warning of a test of primary support at $1200. Breach of primary support at $1260 remains unlikely but would warn of long-term down-trend.

Spot Gold

The greenback rallied on passing of the new tax bill. A test of resistance at 95 is now likely. Breakout above 95 would signal a primary up-trend, bearish for gold.

Dollar Index

Long-term Treasury yields are gradually strengthening, with the 10-year expected to test resistance at 2.50%. Breakout above 2.5/2.6 would signal a primary up-trend which again would be bearish for gold.

10-Year Treasury Yield

A long-term chart of gold shows the precious metal retains its bullish bias. There is strong resistance at $1350 opposed by a broad band of support between $1050 and $1200. Respect of $1200 would signal another test of resistance, while breach of $1150 would warn of a primary down-trend.

Spot Gold

The All Ords Gold Index is also correcting but is somewhat cushioned by the falling Australian Dollar, now at 75 US cents. Respect of the rising trendline would be bullish, while breach of primary support at 4300 would warn of a down-trend.

All Ordinaries Gold Index

Gold rallies as Dollar falls

The greenback is weakening. The Dollar Index retracement respected resistance at 94, confirming a decline to test primary support at the September low of 91. Follow-through below secondary support at 93 would strengthen the signal.

Dollar Index

The falling Dollar strengthened demand for gold which is testing the band of resistance around $1300/ounce. Upward breakout is likely (Twiggs Trend Index holding above zero indicates buying pressure) and would target the September high of $1350. Breach of primary support at $1260 is most unlikely but would be a strong bear signal for gold.

Spot Gold

The All Ordinaries Gold Index is headed for a test of long-term resistance at 5000 in response to the falling Aussie Dollar and rising gold prices in USD.

All Ordinaries Gold Index

Gold and crude oil tend to rise and fall in unison over the long-term. The primary up-trend in crude prices improves the long-term outlook for gold.

Nymex Light Crude

Falling Aussie Dollar boosts Gold stocks

The Aussie Dollar is tanking, falling from a September high of 81 US cents to below 76 US cents. Test of support at 73.50 is likely.

Australian Dollar AUDUSD

The All Ords Gold Index ($XGD) responded to the weakening Aussie Dollar, despite a lackluster performance from gold. Breakout above 5000 would signal a new primary advance, offering a target of 5650*.

All Ords Gold Index ($XGD)

* Target calculation: 5000 + ( 5000 – 4350 ) = 5650

Gold: Further weakness likely

US Treasury yields are rising, with the 10-year yield breaking through 1.80 percent to signal a test of 2.0 percent. Further rises are likely on the back of stronger GDP figures for the last quarter.

10-year Treasury Yields

The Chinese Yuan continues to depreciate against the Dollar in anticipation of another rate rise from the Fed.

USDCNY

Spot gold displays a weak retracement off support at $1250/ounce, with short candles indicating a lack of conviction. Another primary decline is likely and would test primary support at $1200.

Spot Gold

The ASX All Ordinaries Gold Index respected the descending trendline, suggesting another decline. Reversal below 4300 would confirm, offering a target of 4000.

All Ordinaries Gold Index

Gold selling pressure continues

Selling pressure on gold continues, with the SPDR Gold [GLD] ETF consolidating in a bearish narrow band above support at 119. Twiggs Money Flow below zero warns of long-term selling pressure. Continuation of the down-trend is likely and breach of 119 would signal another decline.

SPDR Gold

Spot gold displays a similar narrow consolidation at $1250/ounce. Continuation is likely and would test primary support at $1200.

Spot Gold

The ASX All Ordinaries Gold Index recovered above resistance at 4500 but has so far respected the descending trendline. Respect is likely and reversal below 4300 would signal a decline to 4000.

All Ordinaries Gold Index

Gold: The importance of $1200/ounce

Interest rates are rising, driving gold lower. Long-term Treasury yields are heading for a test of resistance at 2.0 percent but a lot depends on continued stability in financial markets.

10-Year Treasury Yields

The Chinese Yuan continues its devaluation against the Dollar. Any sharp movements would spur global instability and increase demand for gold. But at present Dollar appreciation proceeds at a measured pace.

USDCNY

Selling pressure on gold has increased, reflected by the steep fall of Twiggs Money Flow on the SPDR Gold [GLD] ETF. A larger (TMF) peak near zero would warn of a long-term sell-off.

SPDR Gold

Spot gold has paused in its descent, with a short candle on the weekly chart reflecting short-term support at $1250/ounce, but expect a test of primary support at $1200.

Spot Gold

A long-term monthly chart of gold reflects the importance of support at $1200. The high of 2009, the lows of 2013, and the recent lows in April and June, all reinforce strength at $1200. Breach of this level would signal a long-term down-trend.

Spot Gold

The ASX All Ordinaries Gold Index retraced to test resistance at 4500 after the recent breakout. Respect is likely and would signal decline to 4000.

All Ordinaries Gold Index

Gold breaches $1300/ounce

Spot gold broke support at $1300/ounce warning of a test of primary support at $1200. The up-trend has lost momentum, reflected by penetration of the rising trendline, but consolidation above $1200 would suggest that the trend is intact. Breach of $1200 is now as likely, however, and would warn of a test of the 2015 low at $1050/ounce.

Spot Gold

The ASX All Ordinaries Gold Index is testing support at 4500. Breach is likely and would warn of a primary down-trend.

All Ordinaries Gold Index