Gold is once again attractive, but for how long ?.....
Gold and other precious metal have been in bear market territory since the start of 2013, losing as much as 60 % off its value . If you remember in my first blog post, we saw that buying an asset once it close above it's 10 months MA , produce pretty good results. The same strategy can be used with ETFs or indices tracking gold. However, to reduce the probability of false signals, just like we saw in 2014, we can use the Rate of Change (ROC) indicator as a second confirmation .
I like to to set the ROC at 12, meaning its calculate the rate of change of the past 12 months . IF the ROC (12) is above 0 AND the asset is above it's 10 months MA , then I consider this as a strong buy signal, which is the case this month. I will update you with the status of this trade.