Gold tests $1800/ounce

By Colin Twiggs
February 16th, 2012 2:30 a.m. ET (6:30 p:m AET)

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Spot gold is testing resistance at $1800/ounce on the weekly chart after completing a small flag to signal continuation of the up-trend. Breakout would signal a primary advance to $2100*. Respect of the zero line by 63-day Twiggs Momentum would strengthen the signal.

* Target calculation: 1800 + ( 1800 - 1500 ) = 2100

The US Dollar Index remains weak as inflation expectations rise. Failure of medium-term support at 78.50 would warn of trend weakness, while recovery above 80.00 would indicate trend strength. Target for a breakout above 81.50 would be 85.00*.

* Target calculation: 80 + ( 80 - 75 ) = 85

Geniuses and prophets do not usually excel in professional learning, and their originality, if any, is often due precisely to the fact that they do not.

~ Joseph Schumpeter: Capitalism, Socialism and Democracy