On Thursday, the Gold ETF nudged above the 20-Day high (see top chart). That's not convincing enough to call a breakout. It did occur, however, after two days of consolidation just below that key level. So it is looking much more positive for the Gold ETF. That, of course, is a negative for the general market as the Gold ETF has an inverse correlation to the XAO of -0.7.The ratio of Gold/XAO shows a break of the down trend line from early July (see lower chart). Usually a sustained uptrend in Gold can't be sustained unless the chart line manages a break above the 55-Day Moving Average. Once again the chart line is nudging up to that level after a break of the down trend line. That looks promising. A break above the 55-Day Moving Average is not sufficient of itself to give a medium term buy signal, but it is a necessary pre-condition.
I've just checked the price of Gold in Ozzie Dollars and last night it rose in America by 0.82%. Unless there's a set back today in Australia, that now looks like the Gold ETF is on its way upwards.
Good luck,
Red
Disclosure - I have a small position now in the Gold ETF.
No comments:
Post a Comment