Gold soared 80% the last time this indicator flashed buy
In May, I told you gold was going higher.
Since my essay, the price of gold hasn’t done anything. Gold is only up around 2% over the past three months. That’s not exactly the big return most gold bulls are looking for.
But last week, I showed you how the “topping” action in the U.S. dollar could soon send the price of gold soaring in the short term.
And we’re likely about to get a “buy” signal from one long-term gold-buying indicator. The last time this indicator flashed “buy,” gold soared 80% in a little more than two years…
Take a look at this long-term monthly chart of gold…
The bottom of the chart shows the Moving Average Convergence Divergence (MACD) momentum indicator. On a short-term basis, the MACD shows overbought and oversold conditions. On a long-term basis, the MACD can be used as a timing indicator.
Without getting too complicated, when the shorter-term black trend line crosses above the longer-term red trend line, we have a “buy” signal. When the black line crosses below the red line, we have a “sell” signal.
The arrows on the chart show you how previous buy and sell signals have worked out in the past.
Keep in mind, this is a MONTHLY chart. So these are long-term buy and sell signals. They point out trends that are likely to last a year or more.
For example, the last buy signal for gold was back in October 2009. The signal lasted for more than two years, and gold rallied from about $1,000 per ounce to more than $1,800 – around an 80% gain – just before the MACD indicator generated a sell signal.
That sell signal has now been in place for 2.5 years. Gold has fallen from $1,800 per ounce to its current price of around $1,300.
But look at the setup on the MACD indicator. The black line is curling up and is on the verge of crossing over the red line. If this happens, it will generate a long-term buy signal for gold – the first long-term buy signal since 2009.
Since this is a monthly chart, all that matters is how the indicator looks at the end of the month. But based on how it looks right now, gold is about to soar.
Ha….and Mr. Bob Moriarty was ringin the bell 8/15 the bottom is in.
But no one says a damn thing here regarding his post on 321gold.
Rick Rule says this correction is just part of the process for more.gains
ahead as well.
Ha………..
Yes, the bottom is in! Repeat, the bottom is in! The bottom is in!
Looking forward to major gains in the next few years for gold, and especially silver.
I just heard a piece of news that there is major shortage of solar panels in China since China has been putting a lot of these panels on buildings in recent years. The supply surplus is gone. Solar panels need silver. The quantity is minute but the number of solar panels is large. Steven Leeb said that there is not enough silver reserve in the world to build solar industry. I hope he is right.
Silver looks hopeless. Great time to buy. Patience ! Few have it.
Other than that I’m on the look out for gold bears.
They become ..enraged…when gold starts movin up.
It enrages them because only the “courageous” buy gold.
Only the courageous and those of us who are motivated differently!
People who predict as of a specific date and time have to be really lucky.
I would guess that Bob and Rick are a little loser and discussing trend changes.
Of course Rick is correct. It is pretty obvious that without a downturn significant, additional gains will not occur.
Hope springs eternal, and seasonality is on the bulls side. But I recall Trader Rog getting excited in Augusts of yore predicting a breakout to the upside in the when the leaves start turning colors. Let’s hope it works that way this time.
Or Trader Rog is going to get a lot of hate mail.
Ruff…………..
By August of yore do you mean last year?
Maybe he meant two years ago. Back in the days when we still knew bb as Benb. For a walk down memory lane you can read Rogers article of August 20th 2012. Some of it was pretty good even if none of it accurately predicted the future. The comments that follow are the best part though….waiting for a big bounce off 1660….oh the dreams and fantasies that we laboured under so recently!
Roger Wiegand Essay on the Korelin Economics Report — August 20th 2012.
http://www.kereport.com/2012/08/20/psychological-mishaps-abound/
Birdman, on a scale from 1 -10 you just scored a ten! Lately, the technicals and fundamentals are being overwhelmed by the market manipulations of western central bank and their cronies.
Al, I remember Roger’s comments but not exactly when other than he was right for several seasons until he was wrong predicting fall rallies). I used to bounce his prediction against my charts as I do with your latest guest speakers. His comments lead me to believe he was using Elliot Waves–which I don’t put much faith in, even though they were congruent with what I was reading using different technicals. But any more, all I can say for sure the “free markets” are but a distant memory of how it used to be.
Those were the days bb! Back then I only read this site but mostly kept quiet. Probably just as well because the hardened gold people would have been out for my blood if I had told them how I felt at the time. Amazing how our perspectives can change so much in so few months. I love some of Docs comments from back then.
Interesting – I looked at another monthly gold chart a number of weeks ago on sharelynx.net
http://www.sharelynx.com/chartstemp/AUBULLRUN.php
3rd ome down, black background.
Note similarity in chart action on the monthly chart 1980-1982 vs 2011-2013. Not a nice similarity. Unfortunately this chart does not chow the action around 1974 to which the 2011-2013 crash has also been compared. So the jury is still out. When I look at it, I don’t like it.
In 1980s, FED rate was 20%. Volcker FED created a deep recession to save the dollar. Many people wanted to kill him. Production cost for gold might be $100 and for silver about $2. What is it now? As I know of, all silver producers lose money except Silver Wheaton, which is a silver marketing company not producer. I always buy profitable companies and I noticed that my silver holdings (ex SLW) turned money loosers. Even to keep production going, it need $23, let alone reinvestment, upgrade and recouping exploration cost. Silver is consumed so without production, many industried are going bye-bye.
golds about to “surge 80%”? Have I stumbled upon the kwn site?
Read the title of the article again. It said gold surged 80% LAST TIME. I don’t a problem with this statement.
BTW, I think a lot of KWN has been saying will be proven correct in the future. US government is running wild.
My fault, guess I shouldnt assume the article is suggesting gold could “soar” 80% when the “signal” occurs. lol
There are 2 sides to every economic story, yes, a silver 5 cent piece bought a lot more than our nickel today, only thing was, nobody had a 5cent piece to spend when they were silver. (just an example)
Was the government running so “wild”?
Are they now?
We may not know until its history.
bb, if we have a poll here whether the government is running wild, I feel the result is carved on stone.
Happy trading.
Check the article/comments that Bird posted, sounded to me that gold was headed higher at about $1600. Sure glad I shorted the dow. lol
Ha….2 years ago. All that jaw flappin B.S.
Sounds just like now.
Only this time its a bull market. Now the same
posters who were very bullish back then got gold
currently fallin on its arse. Some are posters who
bashed me near the bottom.
Been there, done that !!!!!!
Technicals and fundamentals don’t mean a dam when for example, 5000+ paper contracts smash the market. They don’t have a chance!
I feel that this indicator makes sense. It measures the momentum change in a long term. However, I don’t think it can tell you about short term spike up or downs. I agree with the long term pattern. You don’t even need chart to tell you. Unfortunately, most people do not have the patience.