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Gold target of $2000

By Colin Twiggs
August 11th, 2011 5:00 a.m. ET (7:00 p:m AET)

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Gold tests $1800/ounce

Spot gold is testing resistance at $1800. A short retracement would indicate that a test of $2000* is imminent.

Spot Gold

* Target calculation: 1800 + ( 1800 1600 ) = 2000

The Gold-Oil Ratio is headed for the overbought level at 20:1.

Gold-Oil Ratio

Dollar Index

The Dollar Index has consolidated between 73 and 76.50 for several months. 63-day Momentum holding below zero indicates a strong down-trend. Breakout below 73.50 would warn of another decline, with a target of 70*. Recovery above 76.50 is unlikely, but would signal reversal to an up-trend.

Dollar Index

* Target calculation: 73 – ( 76 – 73 ) = 70

Brent Crude still undecided

Brent crude is still hesitant about joining Light (WTI) crude in a primary down-trend. After breaking through support at $105/barrel, the stock market bounce fueled a rally to test the new resistance level. The hourly chart is currently whipsawing around $105 without clear direction. Follow-through above $107 would warn of a bear trap, but target for the breakout is $90*.

Brent Crude

* Target calculation: 105 - ( 120 - 105 ) = 90

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