Gold: On July 27, August, October and December 2017 New York gold generated intermediate term buy signals after generating short term buy signals on July 21.
On July 21, we recommended light bullish positions in gold and these should continue to be held with the caveat mentioned in the July 21 note (see below). For equity traders we recommend Royal Gold (RGLD), but keep in mind the August 9 earnings report is around the corner.
From the July 21 note on gold:
“Although gold has not reacted to the weak dollar and the relatively modest interest rate increases in the 10 year note, we think it is likely gold will experience substantial firmness in the period just ahead. The moving average setup on a daily and weekly basis is bullish.”
“For example, the 10 week moving average stands at 1251.20, 20 week 1252.10, 50 week 1243.40 and the 100 week moving average of 1221.30 on the continuation chart.”
“The daily moving averages show a similar set up with the 20 day moving average of 1233.40, 50 day of 1249.00, 100 day of 1247.30 in the 200 day at 1230.80. The moving averages are telling us that the market has found firmer footing over an extended period of time.”
“Seasonally gold begins to strengthen in August. For example, during the past 20 years the average gain during of August is 1.9% and the average advance during September is 2.4%.”
“We think light bullish positions are warranted, especially because the risk is relatively low at this juncture. One caveat is that the euro could begin to weaken, which would strengthen the dollar and this could dampen gold’s advance.”
Dow Transports: DJ Transports will generated an intermediate term sell on July 28 after a short term sell signal on July 21.
Industrials: Cap (XLI) and equal weight industrial (RGI) ETFs generated on short term sell signals on July 28.