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Gold and the dollar

By Colin Twiggs
January 17th, 2013 2:00 a.m. ET (6:00 p:m AET)

These extracts from my trading diary are for educational purposes. Any advice contained therein is provided for the general information of readers and does not have regard to any particular person's investment objectives, financial situation or needs and must not be construed as advice to buy, sell, hold or otherwise deal with any securities or other investments. Accordingly, no reader should act on the basis of any information contained therein without first having consulted a suitably qualified financial advisor. Full terms and conditions can be found at Terms of Use.



Gold is undergoing a correction on the weekly chart. Declining momentum and breach of the long-term rising trendline suggest that the 5-year bull-trend is ending, but recovery above $1700 per ounce would indicate one more attempt at $1800 resistance. Respect of $1700, however, would indicate a test of primary support at the May 2012 low at $1525.

Spot Gold

The Dollar Index respected resistance at 81 and is likely to re-test primary support at 78.50. Twiggs Momentum oscillating below zero already indicates a primary down-trend — confirmed if primary support is broken. Recovery above 81.50 remains unlikely, but would indicate an advance to 84.

US Dollar Index

* Target calculation: 78.5 - ( 81.5 - 78.5 ) = 75.5



He who knows when he can fight and when he cannot, will be victorious.

~ Sun Tzu: The Art of War

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