SAMT Blog
The year of metals
13. January 2020, by Mario V. Guffanti
Technical Analysis
In the last two years I have written several articles, both on precious metals and industrial metals. I would like to start this 2020 by talking in specific about three metals and why I consider them to be particularly important for the year that has just begun.
The first is the noble metal par excellence, Gold. Although it had a good performance in 2019 (+18.26%), I would like to consider it in this article exclusively under the aspect of asset class integration in a portfolio, comparing it with equity investment. In July 2019, I wrote an article (see this link), in which I talked about the existence, starting in August 1971, when US President Nixon suspended the convertibility between the dollar and Gold, of four time windows in which Gold and S&P500 alternated very strongly in terms of performance. The last period, which started on 6 September 2011, when Gold peaked at USD 1,920.30 per ounce, saw the equity asset class dominate over the yellow metal.
If we look closely, starting in 2014, at the Relative Strength indicator between Gold and the S&P 500, we can see that it is confined by a bearish trendline throughout the period. However, since September 2018 a probable reversal appears: we note that the indicator has made two rising lows (L1 and L2), two rising highs (H1 and H2), and potential...
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