Gold suffers from strong dollar
By Colin Twiggs
May 24th, 2012 1:00 a.m. ET (5:00 p:m AET)
The US Dollar Index broke resistance at 81.80, signaling the start of a primary advance to 86.00*. The 63-day Twiggs Momentum trough above zero indicates a strong up-trend. Expect retracement to test the new support level at 81.50/81.80. Respect would confirm the bull signal.
* Target calculation: 82 + ( 82 - 78 ) = 86
Spot Gold is testing the band of support between $1500 and $1550/ounce. Wednesday's long tail is evidence of buying support, but declining 63-day Twiggs Momentum (below zero) warns of a primary down-trend. Another rally that respects resistance at $1600 would strengthen the bear signal. Breakout below $1500 would confirm, offering a target of $1200*. Recovery above $1600, while unlikely, would suggest another test of $1800.
* Target calculation: 1500 - ( 1800 - 1500 ) = 1200
People do not lack strength; they lack will.
~ Victor Hugo