Gold: The Putin factor

By Colin Twiggs
March 18th, 2013 2:30 a.m. EDT (5:30 p:m AEDT)

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Spot gold is normally a reliable indicator of inflation expectations, but rising tensions over Ukraine and Crimea are likely to increase demand for gold as a safe haven. The yellow metal broke through resistance at $1350/ounce but is retracing to test the new support level. Respect of the rising trendline would confirm an advance to $1420. Crossover of 13-week Twiggs Momentum above zero (and earlier bullish divergence) signals a primary up-trend. Breakout above $1420 still appears some way off, but would offer a target of $1600/ounce*.

Spot Gold

* Target calculation: 1400 + ( 1400 - 1200 ) = 1600

Interest Rates and the Dollar

Treasury yields are easing, with the yield on ten-year Treasury Notes again testing support at 2.60 percent. Consolidation between 2.60 and 2.80 percent would be a bearish formation. Breakout above 2.80 would indicate an advance to 3.50 percent*; confirmed if there is follow-through above 3.00 percent. But bearish divergence on 13-week Twiggs Momentum continues to warn of weakness and breach of primary support at 2.50 percent would signal a primary down-trend.

10-Year Treasury Yields

* Target calculation: 3.00 + ( 3.00 - 2.50 ) = 3.50

The Dollar Index is falling, in line with softer Treasury yields. Breach of support at 79.00 would confirm a primary down-trend. A 13-week Twiggs Momentum peak below zero also suggests weakness.

Dollar Index

* Target calculation: 79.0 - ( 81.5 - 79.0 ) = 76.5

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Colin Twiggs

In historical events great men — so-called — are but labels serving to give a name to the event, and like labels they have the least possible connection with the event itself. Every action of theirs, that seems to them an act of their own free will, is in an historical sense not free at all, but in bondage to the whole course of previous history, and predestined from all eternity.

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