The gold bullion chart (above) shows us a number of positive technical factors that might influence us to begin buying new, or adding to existing positions in the metal soon. Starting with the big picture stuff, working down to the finer details:
- The uptrend that began in 2019 is still intact.
- The 200 day moving average is supporting the stock.
- A/D line at bottom continues showing positive moneyflow
- Overbought conditions from late summer (per momentum hook-downs) have been rectified
- Neartermed momentum stochastics has hooked up.
- Moneyflow momentum (top pane), RSI and MACD are approaching turnaround levels
As an aside, I like silver too. The big picture on the silver chart suggests that if the current consolidation (the “handle” from the cup & handle breakout) breaks to the upside, there is considerable upside into its old highs near $40:
While momentum may be in the process of bottoming for these precious metals, we have a positive signal from the contrarian Sentiment OPTIX, courtesy sentimentrader.com. Anything below the green (bottom) horizontal line suggests the asset is oversold. You will note that the OPTIX has a pretty decent track record for buy/sell signals.
Finally, we should look at seasonality for gold. Note that the metal can be a bit weak over the final quarter of the year, according to the Equtiyclock chart. But January can signal the beginning of a very strong move for the metal.
Perhaps its time to consider gold if you don’t hold some in your portfolio. Producers are more leveraged to the metal, so you can consider either the commodity, or an equity position for greater leverage.