Gold breaks support at $1600/ounce

By Colin Twiggs
May 9th, 2012 11:00 p.m. ET (1:00 p:m AET)

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Spot Gold broke its long-term rising trendline and support at $1600, warning of a primary down-trend. Reversal of 63-day Twiggs Momentum below zero strengthens the signal. Failure of primary support at $1500 would confirm, offering a target of $1200*. Recovery above $1600 would indicate all bets are off.

* Target calculation: 1500 - ( 1800 - 1500 ) = 1200

The Gold Bugs Index, representing un-hedged gold stocks, has been suggesting a gold down-trend for some time.

The Dollar Index broke through resistance at 80 on the weekly chart and a 63-day Twiggs Momentum trough above zero indicates another rally. Expect a test of 82 in the next few weeks, mirrored by a weakening gold price.

In reading the lives of great men, I found that the first victory they won was over themselves... self-discipline with all of them came first.

~ Harry S. Truman