Model Gold Portfolio: Long, 11/20 (previous signal neutral, 10/27)
Technical Read: GLD selling on the 19th did not gain any downside momentum for the 20th. Prices reversed to the upside and thus indicate a lack of selling power in the yellow metal. The Backdrop still has negatives for gold but has improved. The previous question was would the bullish trend have the strength to overcome some overbought positioning. The bulls have won out and the models are now positive.
- Catalyst 1 – The US Dollar index is now range bound, meaning the uptrend is on hold. Prices are now hugging the bottom range. The next surprise move for the greenback could be a stop hunting raid south (86.50 on DXY). This is neutral for gold (for now).
- Catalyst 2 – The S&P 500 closed up and is holding above the pseudo break-out at 2040. It is not a blast off but the up-trend is still in place. This is mildly bearish for gold.
- Catalyst 3 – The US Labor Department said its index for final demand increased .2% in October reversing a PPI decline of .1% in September. A modest decline was expected but the services sector component provided the boost. This is a rare bit of non-deflationary news and is a mild positive for gold.
- Bond Trading Signals. I am offering a similar Mummy process for Treasuries. See the “Bond Trading Signals” tab for more info.
GH Garrett – Veteran Commodity Watcher for ConquerTheMummy.com