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Gold Mining - Using Each Trading Day's Trend 4,179 replies
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trading currencies or metals? 9 replies
DislikedHello EF5 I'm curious, why the St. Louis Fed? I'm unclear as to how that relates to Gold? Could it be that the St. Fed tracks also with the
US Dollar, and that Gold is price in US dollars? Or is this a correlation that you have observed and are also unsure why this occurs? - CuriousIgnored
DislikedAh...Ok. I get it. This is the London fix you are tracking. And I would assume you are comparing it to the NY close? Is that correct? I guess I am asking what you are correlating? Gold London to Gold NY? or NY Fed to Gold London? I get the numbers on the right side of your chart are the price of gold, but don't understand the numbers on the left side of the chart.Ignored
Disliked... The first is 1974-1976 and the second is 2018-2019. The left side of the chart shows gold prices throughout the 1974-1976 period and the right side of the chart shows prices in 2018-2019...Ignored
Disliked{quote} Price wise I would agree...but the chart listed here has me thinking about it really. I would appear nominal prices are just now catching up to inflation adjusted prices. This confluence makes me wonder if we're not due for even higher gold prices considering that historically nominal price has been below the inflation adjusted price for at least the last century. In other words the lack of inflation (by historic standards) ever since the large economic crisis...Ignored
Disliked{quote} So if I read your comments correctly...and the 90% correlation between the two time frames...the forcast is for lower nominal prices over the next 12 months...is that correct?Ignored
DislikedI find this very interesting and in fact I took off 1/3 of my Gold position just thinking about this correlation. (Well it had made over 500 pips too!!)Ignored
DislikedA lot of commodities traders like to use seasonal data for their trades so for my next study I decided to a create a seasonal chart for gold. Here's how it turned out: {image} Historically, August through January has been the best time to be long gold whereas February through July has been less directional.Ignored
Disliked{quote} Absolutely correct. Talking about specific months, January historically has best gold performance. June and July are average while September is worst! {image}Ignored
Disliked{quote} Let's trade gold just on January? In my opinion we should separate kind of traders. Investor traders, who trade on 4H and higher, can use the historical data, correlation and other, but simple treders(day traders, swing traders) don't need look at correlation, news or else - they have to learn charts and find pattern on it.Ignored
DislikedIf the correlation holds it's true that we should expect lower prices in the next 12 months. Anything can happen though, especially with the current tenuous state of affairs in geopolitics, so I wouldn't place too much weight on it.Ignored
DislikedInteresting chart! If I understand it correctly though, it's just demonstrating what the price of gold would have been historically if it were priced in 2018 dollars.Ignored
DislikedI've never looked at seasonal charts and have no idea how to use them. In addition I have found most historical methods of trading to be most inaccurate as to timing and/or direction when it comes down to actionable methodology. I completely understand what you are saying here. I have just never been able to use it effectively. I used to correspond with a trader who would trade gold by the phases of the moon. While on the surface that sounds a little "luney" he had good reason for his/her theory. It was based on eastern (India I think) religious...Ignored
Disliked{quote} That's how I look at it as well. However I also see it as the price of gold was below value because the USD (which gold is denominated) was over inflated. Of note for me was 1972 when Nixon took the US off the gold standard, and really inflated the crap out of the USD. I've read that this was because the US was the depository (safe keeping) for Gold during WWII, and that most European countries were wanting their gold back. Since the USD was (up to that point) anchored to Gold, or rather how much gold was kept in the US, returning all that...Ignored
Long-term I think you're right that the prospect for gold is bullish. The next global recession is probably <2yrs away and things are going to get very dicey for the central banks. Even in a favorable scenario for the global economy, there's going to be a major money supply expansion which should be very bullish for gold.