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Can Gold Regain Its Medium-Term Glitter?

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An examination of currencies and other metrics show bullish implications for gold are still in place. Here's why.

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Let's move on to the yellow metal itself – this time we decided to provide you with the look at gold from the Japanese yen perspective.



The most interesting thing visible on the above gold chart is that when gold declined recently, it allowed the price in yen to verify a move above its declining resistance line. This breakout was verified, and the RSI is no longer heavily overbought. The situation here is bullish.

Is a major bottom in? The recent signal from the SP Gold Stock Extreme Indicator #2 confirms this theory.



There was a strong buy signal seen earlier this month suggesting that the bottom is in. The rebound was seen and the outlook remains bullish as this indicator suggests at least a 2-week rally in gold, silver and mining stocks. Consequently, the bullish implications are still in place.

Summing up, the long-term Euro Index chart and the medium-term USD Index chart suggest that lower values might be more probable than not for the dollar in the medium term. Along with a bullish picture from the gold in Japanese yen chart, the implications here are medium-term bullish for precious metals.

For the full version of this essay and more, visit Sunshine Profits' website.

Twitter: @SunshineProfits
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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