Gold correction continues

By Colin Twiggs
March 22nd, 2012 6:00 a.m. ET (9:00 p:m AET)

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Spot gold found short-term support at $1640/ounce but is likely to continue its correction to test primary support at $1500. Reversal of 63-day Twiggs Momentum below zero, for the second time, threatens an iceberg top which would signal a primary down-trend. Breach of primary support at $1500 remains unlikely, but would signal a decline to $1200*.

* Target calculation: 1700 - ( 1800 - 1700 ) = 1600; 1500 - ( 1800 - 1500 ) = 1200

The US Dollar continues in a primary up-trend, the Weekly chart showing the Dollar Index headed for another test of support at 78.00. Failure would warn that the trend is weakening, while respect would signal another attempt at 82.00

* Target calculation: 82 + ( 82 - 78 ) = 86

I place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt.

~ Thomas Jefferson