Wednesday, September 18, 2013

All That Glitters (Gold) Moving Towards An Entry Point

I am awaiting the Fed announcement here and watching the price of gold and gold/precious metal equities pull back on lighter volume levels relative the upward moves. The retracement in the price of the metal and the related equities is not unprecedented. In fact, it is not extraordinary to see a full 100% retracement of a move when gold or other investment are putting in a bottom. I am more inclined to take positions in the group as we retest or approach the lows.

This technical assessment of the price of gold equities and the metal jives with the what I am seeing in the timing models. As the price of gold and the precious metal equities have pulled back, the timing models I employ have improved. Also helping the model results, money supply is increasing in line with seasonal movements. The following charts show the latest timing model and the risk gauge results.

6-month, currently -0.78


1-year, -1.28


2-year, -1.92


Risk Model, remains positive


I continue to hold a large position in gold and the gold equities and considering adding some after the Fed meeting. That decision will be based on the trend in prices in conjunction of the timing model results.


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