Gold, Coverage and Investiment

gold, gold coins, gold barsGold has been the subject of sales in recent weeks, after the peak hit on September 7 began to retrace. Yes, because this is what it is all about, at least until the price remains above the support trendline (bullish) started with the low of December 15, 2016.

It is not excluded that gold can still test the support trendline. In addition, also a static support passes at that level ($ 1,258 area), and the double test (static and dynamic support) has already been done at the beginning of July (chart below).

gold, gold coins, gold future, gold bars


Reading articles and comments, I notice a certain pessimism about gold, in particular, a chart is taken from a Bloomberg article, and you can see below, shows how in 2017 there has been a drop in gold coin sales.

gold, gold coins


For what is my experience, it is times of "negativity" like these, of pessimism, that represent the best opportunities to buy.

Continuing with the analysis, since gold is the safe-haven par excellence, I take a look at the American stock market as well. And I do this with the help of ETF iShares Transportation Average (ticker: IYT).

s&p500, future, gold, chart


As you can see from the two charts (above the S&P500 future, below the IYT), prices are correlated. An increase in one corresponds to an increase in the other, and vice versa. However, there are times when prices do not move in unison and we can see how in those cases, the transport sector moves first with respect to the stock market, going to anticipate the future movement of the S&P500.

ETF, IYT, trasportation, iShares, gold


The same is happening now, with the S&P500 at the top and IYT is retracing. What does it mean? That there is a good chance that the uptrend of the American stock market may take a pause. In addition, always from the chart of the S&P500's future, we can see that the last bullish phase, with continuous new highs, has been accompanied by declining volumes.

If this will happen, gold may have a re-start and benefit from a retracement of the stock market.

Seasonalgo, seasonal trading, spread trading, commodity market


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