Gold - further falls likely
By Colin Twiggs
October 30th, 2014 4:00 a.m. EDT (7:00 p.m. AEDT)
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The yield on ten-year Treasury Notes recovered above the former support level at 2.30%, suggesting another test of 2.50% and the descending trendline. Reversal below 2.30%, however, would warn of another test of primary support at 2.00%. 13-Week Twiggs Momentum below zero continues to signal a primary down-trend.
* Target calculation: 2.30 - ( 2.60 - 2.30 ) = 2.00
The Dollar Index respected its new support level at 84.50 and recovery above 86.5 would confirm a primary advance to 89*. Rising 13-week Twiggs Momentum suggests a healthy (primary) up-trend. Failure of support at 84.50 is unlikely, but would warn of correction to the primary trendline.
* Target calculation: 84 + ( 84 - 79 ) = 89.00
Gold
Low interest rates increase demand for gold by lowering the carrying cost. A rising dollar, however, has the opposite effect.
Gold respected resistance at $1250/ounce, confirming the primary down-trend. Another 13-week Twiggs Momentum peak below zero strengthens the signal. Breach of primary support at $1180 would offer a long-term target of $1000*. Recovery above 1250 is unlikely, but would test the descending trendline around $1300.
* Target calculation: 1200 - ( 1400 - 1200 ) = 1000
Gold Bugs Index, representing un-hedged gold stocks, fell sharply since breaching long-term support at 190. Declining 13-week Twiggs Momentum (below zero) signals a strong primary decline. Bearish for gold.
The price of gold adjusted for inflation (gold/CPI) remains relatively high and further falls are likely.
The less justified a man is in claiming excellence for his own self, the more ready he is to claim all excellence for his nation, his religion, his race or his holy cause.
~ Eric Hoffer
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