Gold breakout imminent

By Colin Twiggs
March 24th, 2011 4:00 a.m. ET (7:00 p:m AEDT)

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Gold rallied off support at $1380 and is testing resistance at $1440. Breakout would signal a primary advance to $1500*. Twiggs Momentum (21-day) respected zero, suggesting another advance.

Spot Gold

* Target calculation: 1400 + ( 1400 - 1300 ) = 1500

The recent dip on 21-day Twiggs Money Flow also respected the zero line, signaling buying pressure.

Spot Gold GLD

US Dollar Index

The US Dollar retraced to test the new resistance level at 76; respect would signal a decline to 71* — a bullish sign for gold. Twiggs Momentum well below zero suggests the down-trend will continue.

US Dollar Index

* Target calculation: 76 - ( 81 - 76 ) = 71


Silver broke through resistance at $36.50, while Momentum is rising strongly. Gold is likely to follow.


* Target calculation: 36.50 + ( 36.50 - 33.50 ) = 39.50

Crude Oil

Nymex WTI recovered sharply. The fast up-trend is likely to eventually end in a blow-off, but will increase inflation fears and boost gold in the short/medium-term.

Crude Oil

* Target calculation: 105 + ( 105 - 97 ) = 113


The CRB Commodities Index is also recovering; a bullish sign for the Australian Dollar.

CRB Commodities Index


The euro is testing resistance at $1.42; breakout would offer a target of $1.54*. A Twiggs Momentum trough above zero would strengthen the bull signal.

Euro US Dollar

* Target calculation: 1.42 + ( 1.42 - 1.30 ) = 1.54

UK Pound Sterling

The pound is consolidating in a narrow range between $1.60 and $1.63; a bullish sign. Breakout above $1.63 would offer a target of the 2009 high at $1.70*. Failure is less likely, but would test primary support at $1.53.

Pound Sterling

* Target calculation: 1.63 + ( 1.63 - 1.53 ) = 1.73

Japanese Yen

The dollar is back in the range between ¥80 and ¥84 the yen — with a bit of help from the G7. The primary trend remains down. Failure of support at ¥80 is likely to encounter further intervention, but the target remains at ¥76*.

US Dollar Yen

* Target calculation: 80 - ( 84 - 80 ) = 76;

Australian Dollar

The Aussie dollar rallied off support at $0.98 against the greenback, headed for $1.02. Commodity prices are recovering, but expect tough resistance (at $1.02). Breakout would offer a target of $1.06*, while respect would suggest another test of $0.98. Failure of support at $0.96 is unlikely, but would signal a primary down-trend.

Australian Dollar US Dollar

* Target calculation: 1.02 + ( 1.02 - 0.98 ) = 1.06

The business of the poet and the novelist is to show the sorriness underlying the grandest things and the grandeur underlying the sorriest things.

~ Thomas Hardy (1840 - 1928)

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