Dollar rebound drives gold and commodities lower

By Colin Twiggs
June 28th, 2012 1:00 a.m. ET (3:00 p:m AET)

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The US Dollar Index respected support at 81.00 and is headed for resistance at 83.50. Breakout would offer a target of 86.00*. 63-Day Twiggs Momentum oscillating above the zero line indicates a healthy up-trend.

* Target calculation: 81 + ( 81 - 78 ) = 84

Spot Gold retreated below support at $1600/ounce. 63-Day Twiggs Momentum reversal below zero signals a primary down-trend. Breach of primary support at $1530 would confirm. Introduction of QE3 by the Fed, however, would commence a new up-trend.

* Target calculation: 1550 - ( 1800 - 1550 ) = 1300

The primary down-trend on CRB Commodities Index is unlikely to change unless we see the introduction of QE3. Declining 63-day Twiggs Momentum below zero indicates a strong primary down-trend.

* Target calculation: 270 - ( 290 - 270 ) = 250

Brent Crude and Nymex WTI Light Crude both offer a target of $75 per barrel. After falling sharply over the last few months, the gap has narrowed to just over $10 per barrel — from a peak of $25 in October 2011. Rapidly expanding gas and oil reserves are driving North American prices lower, while gloomy prospects for European economies have crimped demand for Brent Crude.

* Target calculation: 100 - ( 125 - 100 ) = 75