The Midas Touch Gold Model™ still neutral!
Gold managed to recover towards 1,214 USD early last week. Since then it has been pulling back, but managed to close above 1,200 USD into the weekend. Due to US-holiday, next week should start slowly, but gold has to defend the 1,195/1,200 USD level in order to keep the ongoing bounce valid.
Our Midas Touch Gold Model™ is once again coming up with an neutral conclusion. But as you can see from the table there have been quite a lot of positive developments over the last two weeks.
Especially the new buy signals on the daily chart for gold in USD, in Indian Rupee and in Chinese Yuan do support the expected recovery rally. This of course is coupled with a sell signal for the US-Dollar. The daily chart for gold remains bullish as long as gold can hold above 1,190 USD.
As well, statistically the month of September is gold´s best month of the year! Although gold has not been following its seasonal pattern since late June, a green September has a very high probability.
Negative are the continued outflows of the largest gold ETF (SPDR Gold Shares aka “GLD”). The ETF has lost more than 110 tons of gold since mid of April and has surely been one of the big pressuring factors behind gold´s decline.
The other pretty unfavorable factor are the gold mining stocks. The GDX has just issued a new sell signal on Friday and so far the recent bounce looks very shallow. The miners do not support a larger recovery in gold at this stage. Instead they point towards another sell off or at least a test of the recent lows..
All in all, the Midas Touch Gold Model™ is neutral and still urges to be patient. Tight risk management is key in this beaten down market.