Gold weakens on Dollar strength

By Colin Twiggs
July 31st, 2014 2:00 a.m. EDT (4:00 p.m. AEST)

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  • Treasury yields find support
  • Euro signals a primary down-trend
  • Dollar continues to strengthen
  • Gold weakens

Interest Rates and the Dollar

The yield on ten-year Treasury Notes recovered above 2.50 percent, suggesting that a bottom is forming. Follow-through above 2.65 would strengthen the signal. Reversal below 2.40, however, would confirm a decline to 2.0 percent*.

10-Year Treasury Yields

* Target calculation: 2.50 - ( 3.00 - 2.50 ) = 2.00

The euro broke primary support at $1.35, signaling a primary decline with a target of $1.30*. Reversal of 13-week Twiggs Momentum below zero confirms the down-trend. Recovery above $1.35 is unlikely, but would warn of a bear trap.

EURUSD

* Target calculation: 1.35 - ( 1.40 - 1.35 ) = 1.30

The Dollar Index rallied on strong GDP figures, testing resistance at 81.50. Breakout is likely and would signal a primary advance with a target of 84*. Recovery of 13-week Twiggs Momentum above zero indicates a primary up-trend. Reversal below 80.50 is unlikely, but would warn of another test of primary support at 79.00.

Dollar Index

* Target calculation: 81.50 - ( 81.50 - 79.00 ) = 84.00

Gold

Gold is testing support at $1295/$1300. Failure of support would warn of a primary down-trend. Breach of $1240/$1250 would confirm. Recovery above $1350 is unlikely at present, but would indicate another test of $1400/$1420. Reversal of 13-week Twiggs Momentum below zero would strengthen the bear signal, but oscillation close to the zero line presently signals hesitancy.

Spot Gold

* Target calculation: 1200 - ( 1400 - 1200 ) = 1000


If gold has been prized because it is the most inert element, changeless and incorruptible, water is prized for the opposite reason — its fluidity, mobility, changeability that make it a necessity and a metaphor for life itself. To value gold over water is to value economy over ecology, that which can be locked up over that which connects all things.

~ Rebecca Solnit, Storming the Gates of Paradise