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Gold strengthens as dollar retreats

By Colin Twiggs
November 22nd, 2012 2:00 a.m. ET (6:00 p:m AET)

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Long tails on the last two days of the spot gold daily chart indicate strong support at $1700 per ounce. Breakout above $1740 would indicate another test of $1800. 63-Day Twiggs Momentum well above zero suggests a healthy up-trend. A weakening dollar would strengthen the signal.

Spot Gold

* Target calculation: 1800 + ( 1800 - 1700 ) = 1900

The Dollar Index (weekly chart) retreated below resistance at 81. Follow-through below 80 would test primary support at 78.50, while failure of primary support would complete a head-and-shoulders reversal with a target of 74*. 63-Day Twiggs Momentum holding below zero already suggests a primary down-trend. Breakout above 81.50 is unlikely but would indicate an advance to 84.

US Dollar Index

* Target calculation: 79 - ( 84 - 79 ) = 74

The DJ-UBS Commodity Index (weekly chart) respected support at 140. The 63-day Twiggs Momentum trough above zero suggests a primary up-trend. A weakening dollar would strengthen the signal, while breakout above 152 would confirm. Breach of 140 is unlikely but would test primary support at 126.

DJ-UBS Commodity Index

Nymex WTI Light Crude and ICE Brent Crude are both trending downward. The 63-day Twiggs Momentum peak at zero warns of a primary down-trend. Breach of primary support would confirm: WTI at $78 per barrel and Brent Crude at $90.

Nymex WTI Light Crude


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