Sydney, May.9, free investment ideas .- Gold's bear rally has run out of steam, with continued tests of support at $1440/$1450. Breach would penetrate the rising trendline, indicating another test of primary support at $1320. Target for the decline would be $1200*. Breakout above $1500 is unlikely, but would test $1550.
The Gold Bugs Index, representing un-hedged gold stocks, behaves like a leveraged gold instrument. So far there is no sign of a bounce. Breach of support at 260 would warn of another decline.
Treasury Yields
Ten-year treasury yields rallied sharply at the end of last week and are now testing resistance at 1.80%. Respect of resistance remains likely — after all this is a down-trend — and would suggest another test of the all-time low at 1.40%. Breakout above 1.80% would signal a test of resistance at 2.00/2.05%, while breach of that level would signal a primary up-trend. The thirty year secular bear trend (in yields) continues and would only be reversed by a rise above 4.00%.
Crude Oil
Brent Crude is testing its former support level at $106/barrel. Respect is likely and would offer a target of $92*. Nymex WTI broke out of its trend channel, but the trend remains downward until resistance at $98 is broken. A classic pair trade, the spread between the two is likely to narrow as the European economy under-performs.
Commodities
Commodity prices continue to diverge from stocks, with the S&P 500 advancing while Dow Jones - UBS Commodity Index is headed for primary support at 125.
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