Tuesday, September 3, 2013

Gold's Trend Remains Up Until Further Notice..... All That Glitters

The weekly seasonal changes in M2 money stock appears to moving more in inline with the average seasonal fluctuations in recent weeks. That said, money supply has been rage bound, edging over $10.7 trillion for two weeks before pulling back and likely trending to about $10.65 trillion.
I mention this as the price of gold has rebound smartly to about $1,400 per ounce, as uncertainty about the economy, the Fed's supposed tapering (which I will not harp on again), and a potential U.S. war with Syria. These two moves, in conjunction with a rally in the share price of gold/precious metal equities themselves, have resulted in a further weakening in the timing models. Weakening as it relates to the signalling good long-term entry points. That said, I continue to think the price trend remains up for the near-term future.

First the models.......

6-month model, -0.15

1-year model, -0.95

2-year model, -1.57

3-month model, 1.08

Risk mode, remains positive

The longer term model all remain below the 0 demarcation, indicating, to various degrees, the potential for continued positive performance relative to a buy-and-hold scenario. Additionally, the risk model remains positive and in uptrend, suggesting relative gains for precious metal equities. This is while we move into the September trading, which tends to be the strongest seasonal performance month for precious metal equities. I also note that technically the GDX, GLD, and other other gold equities look to be setting themselves for higher prices. I intend to stick with gold and precious metal equities until we see a definite sign of weakness in conjunction with a negative turn in the timing models. 

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