SAMT Blog
GOLD: can the trend continue?
15. September 2019, by Mario V. Guffanti
Technical Analysis
The bullish gold movement that took place this year was very important and above all very fast. Three weeks ago there was a peak in the yellow metal market and now it has begun a descent of about five percentage points from its maximum. Below I propose an intermarket analysis with short, medium and long term trends to identify critical price levels that could compromise the current bullish trend.
Let's read together the chart below: in the first box we find gold, represented by a blue line, and the Dollar Index (an index consisting of a basket of currencies against the dollar), represented by a red line. In the central box we have the correlation index between gold and the Dollar Index, and in the lower box the volatility of the Dollar Index expressed in terms of standard deviation.
If you look at the correlation index in the central box, you will notice that the curve of the index is for the most part in the red zone (negative correlation), but there are some periods in which the two curves move in the same direction (these are still situations statistically little present). Gold and Dollar Index therefore have a historically fairly stable negative correlation, except in some limited time windows: this means that when the yellow metal goes up the Dolar Index goes down, or vice versa.
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