Dollar surges, yields fall but gold hesitant

By Colin Twiggs
August 27th, 2014 3:00 a.m. EDT (5:00 p.m. AEST)

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  • Dollar surge continues
  • Treasury yields weak retracement
  • Gold uncertainty continues

Interest Rates and the Dollar

The Dollar Index continues its impressive advance. Expect resistance at the 2013 highs at 84.50. Reversal below 81.50 is most unlikely.

Dollar Index

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

The yield on ten-year Treasury Notes is retracing to test its new resistance level at 2.40/2.50 percent. The primary trend is down, with 13-week Twiggs Momentum holding below zero. Respect of resistance is highly likely and would confirm a decline to 2.00 percent*.

10-Year Treasury Yields

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


Gold continues in a narrow range, between $1280 and $1320/ounce, in the apex of the triangle. Both this and oscillation of 13-week Twiggs Momentum close to zero signal uncertainty. Expect further consolidation between $1250 and $1350 in the medium-term. Breakout from that band is likely to indicate future direction. Falling crude prices and low inflation favor a down-trend.

Spot Gold

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

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