These six charts are signaling more upside in gold
From Richard Smith, PhD, Founder, TradeStops:
Our gold forecast since March of this year has been shockingly accurate. We called a local bottom about a month ago and gold prices have moved steadily higher ever since.
We still see more upside ahead. Here’s why…
The Value of Gold
Gold entered the SSI Green Zone back in March. Since then, it’s been bouncing around just above the Yellow Zone between $1,210 and $1,290.
Our time-cycle forecast for gold was originally published back in March and it has been shockingly accurate. We called the July bottom based on this forecast as well and prices have moved up hugging the time–cycle forecast line nicely.
The time–cycle forecast has gold moving higher through September. We don’t make our forecasts based on time–cycles alone, however. There are other reasons that we think gold is headed higher from here as well.
The volume–at–price (VAP) chart shows that gold is once again trading above the peak price–volume level of $1,250. If gold can continue to move a bit higher, it should have a safe shot at $1,400 or higher.
The smart money also seems to be supporting higher gold prices ahead. The commercial hedgers in the futures markets are not excessively short gold futures contracts.
Higher Gold Prices Ahead
You can see in the chart here how when the commercial hedgers are not very short the gold futures markets, the price of gold tends to move higher. By not being super short gold futures, the smart money is telling us that they don’t want to sell their gold at current prices. That usually means higher prices ahead.
Another bullish sign from the futures markets is that the “open interest” is rising off of very low levels. All that really means is that more money is getting “interested” in gold. More interest usually means more buying.
Finally, looking at a little longer–term picture for gold, we can see that if gold can push above $1,350 and even reach for $1,400, then there wouldn’t be much stopping it from testing the 2013 highs around $1,650.
All the signs are pointing to gold heading higher for at least another month. The falling U.S. dollar and the political uncertainty that we’ve been experiencing should be wind in the sails of gold too.
I’d really like to see gold breakout to $1,400. I’m sure you would, too.
Staying the course,
Richard Smith, PhD
Crux note: As you can see, Richard’s mathematical systems leave little to chance. And he’s always looking for ways to improve them. His latest study found a small, effortless tweak in how you structure your portfolio has been proven to boost total returns by as much as 632%. If you’re not making this simple adjustment, you could be missing out on thousands of dollars in lost money. Learn all about this simple trick to turbo-boost your returns right here.